Madhya Pradesh slashes Value-Added Tax on petrol and diesel

Remigio Civitarese
Ottobre 14, 2017

In a major relief to Madhya Pradesh people, the state government on 13th October has announced to slash the Value Added Tax (VAT) on petrol and diesel by 3 per cent and 5 per cent respectively. The central government decision to cut the excise duty on petrol and diesel came as a relief to consumers from three-month long relentless price hike. An additional Rs 1.50 has been reduced in the cess on diesel. Earlier, the central government had reduced the excise duty on petrol and diesel rates by Rs 2 per litre each. PCC chief spokesman KK Mishra said relief is "not enough to be called a relief" and the decision to lower Value-Added Tax is "not for benefit of the common man".

Petroleum minister Dharmendra Pradhan has called for the inclusion of petrol and diesel under the ambit of GST to ensure uniformity of prices. Gujarat levied 28.96% VAT on petrol and diesel prior to the tax cut.

The revised rates will be applicable from Friday midnight, he said. The state would try to make up the revenue loss by adopting austerity measures, he said.

The uptick in petrol and diesel prices weighed heavy on consumer inflation in September, contributing to 5.56 per cent of the index. In Bhopal, petrol will now cost Rs 73.13 per litre against the earlier price Rs 74.79 per litre. "During the UPA government regime under Prime Minister Manmohan Singh, the global crude oil prices were as high as $72 to $75 per barrel and yet prices of fuel were not as high as it is today", Mishra argued.

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