Nifty99000 100%

Sensex99000 100%

Article rating: 3.9
Article rating: 3.5
Article rating: 5.0
Article rating: 4.0
Article rating: No rating
Article rating: 4.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating


Centre urges states to cut VAT on petrol, diesel

Author: IANS/Thursday, October 5, 2017/Categories: Oil & Gas

Centre urges states to cut VAT on petrol, diesel

Delhi - Finance Minister Arun Jaitley will soon write to all state Chief Ministers urging them to cut sales tax, or value added tax (VAT), on petrol and diesel, Petroleum Minister Dharmendra Pradhan said.

"We have proactively cut excise duty. Now it is the turn of states to reduce VAT," he said.

Noting that states impose VAT ranging from 26% to 38% on fuel, the minister added: "I urge all states to reduce VAT by 5% in line with the cut in central excise duty to provide farmers and consumers with one more slab of relief." 

Under all round attack on rising fuel prices, the government on Tuesday decided to slash the excise duty on petrol and diesel by Rs 2 per litre -- effective Wednesday -- to cushion the impact of rise in international crude prices, in a decision that will cost the central exchequer Rs 13,000 crore during the remaining part of the fiscal.

Earlier, due to the increase in the international prices of petrol and diesel during the last few weeks, the retail selling prices of petrol and diesel in Delhi had risen to Rs 70.83 a litre and Rs 59.07 per litre, respectively, as on October 2. 

Pradhan said the Centre has sacrificed Rs 26,000 crore in revenue in the cut in excise duty. 

"States are the biggest beneficiaries. They get all of the VAT collection plus they also get 42% of the central excise collections. The amount remaining with the Centre is used to finance centrally sponsored schemes in states," he said. 

As a result of the excise duty reduction, petrol price has been cut by Rs 2.50 per litre and that of diesel by Rs 2.25, he added. 

Under the daily pricing regime for transport fuels, petrol in Delhi on Wednesday was costing Rs 68.38 a litre and diesel Rs 56.89. 

Announcing the excise cut, the government said the rise in the prices of petrol and diesel is also reflected in WPI, or wholesale, inflation, which has increased to 3.24% for the month of August 2017, as compared to 1.88% for the month of July 2017, and which prompted the government to act swiftly. 

Last month, petrol prices in Mumbai, for instance, crossed levels they had touched before the Narendra Modi government took charge in 2014. In response to criticism on rising fuel prices, Petroleum Minister Dharmendra Pradhan clarified that the excise revenues served for spending on social development schemes. 

Despite demands from industry, petroleum products, as well as natural gas, do not come under the Goods and Services Tax (GST) regime. These continue to be taxed as per the old VAT regime.

Print Rate this article:
No rating

Number of views (184)/Comments (0)

rajyashree guha


Other posts by IANS
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free