Following the Centre's pressure on all State Governments to cut Value Added Tax (VAT) on petroleum products in response to its bringing down Excise Duty, administration in Jharkhand is also considering easing consumers' burden to some extent.
Although no formal deliberation in this regard is on the roll back so far, highly-placed sources with the Government revealed that the matter is very much under consideration at the top level.
"The Centre wants and has formally requested the States to cut VAT on petrol and diesel after they slashed Excise Duty. Any proposal in this regard is not with the department but being a BJP-ruled State the Government may go for it in the days to come," said Deputy Commissioner with Commercial Taxes Department Sheo Sahai Singh.
It is learnt that the decision may come after Principal Secretary of the Department KK Khandelwal returns from Delhi where he is to attend GST Council meeting scheduled for Friday. The churn to reduce tax burden on petroleum products is there since consistent rise in the prices of petrol and diesel over last one month when the prices are let-off in market.
Under pressure, the Centre cut Excise Duty first and later Union Petroleum Minister Dharmendra Pradhan requested all the States to reduce VAT on petroleum products as their bit to tame the prices. Union Finance Minister Arun Jaitley also followed in suit while making a similar request. However, so far only Gujarat has responded by announcing five per cent reduction in VAT. When contacted, Cabinet Minister CP Singh justified the call. "So far I have had no discussion with the Chief Minister on this issue who holds the department. Being a responsive Government some step would surely be taken," said the Minister. Jharkhand Government levies 31.5 per cent VAT on petrol and 24.62 per cent on diesel placing it among the States with top rates.
On the other, the soaring fuel prices have also worried the dealers of petroleum products. "Higher prices are not good for the common people as well as farmers who are heavily dependent on diesel. Now when the Centre has requested the State to follow the suit after they have cut the Excise Duty, the State Government should also respond. We have decided to meet KK Khandelwal (Principal Secretary of Commercials Taxes Department) on Monday to urge him in this regard," said Ashok Singh, president of Jharkhand Petroleum Dealers Association.
The Centre in its plea for at least 5 per cent VAT reduction while slashing Excise Duty by Rs 2 per liter on the twin fuels has also observed that since the States are the biggest beneficiary pocketing entire VAT collection along with getting 42 per cent of the central excise collections, they should also rise to the occasion like this. Also, most of the Centre's revenue is spent on funding centrally sponsored schemes of the State.