New Delhi, After the reduction in excise duty on petrol and diesel, the process of reduction in the duty on it has started in the states. The Maharashtra government on Sunday reduced VAT i.e. Value Added Tax on petrol and diesel. The state government has reduced petrol by Rs 2.08 per liter and diesel by Rs 1.44 per liter. Earlier Rajasthan and Kerala governments also cut VAT on both the fuels.
However, the Maharashtra government, while announcing the reduction in VAT, said that the deduction will be implemented with immediate effect. Significantly, a day earlier on Friday, the Central Government had announced reduction of excise duty on petrol and diesel by Rs 8 and Rs 6 per liter respectively. With the reduction of excise duty, the price of petrol has come down by about Rs 9.5 per liter and that of diesel by about Rs 7 per liter.
Earlier, the Rajasthan government had announced reduction of VAT on petrol by Rs 2.48 per liter and on diesel by Rs 1.16 per liter. Announcing the reduction in VAT, Chief Minister Ashok Gehlot said that due to this, the state government will suffer a revenue loss of Rs 12 hundred crore every year. The Kerala government had also cut tax on petrol by Rs 2.41 and on diesel by Rs 1.36. After the reduction in VAT, the Maharashtra government is likely to lose about Rs 80 crore on petrol and Rs 125 crore on diesel every month. Accordingly, the government will have a revenue loss of about 2.5 thousand crore rupees annually.
