‘Please Reduce VAT on Fuel For People’s Welfare’, PM Modi to Opposition-ruled States; Uddhav Reacts

The Central government had reduced excise duty on petrol and diesel by Rs 5 and Rs 10 respectively. Following the Centre's decision, 25 states and UTs, mostly BJP-ruled had reduced VAT on petrol and diesel to give relief to people. 

New Delhi: As fuel prices continued to rise across the country, Prime Minister Narendra Modi on Wednesday asked states to reduce value-added tax (VAT) on petrol and diesel in the national interest and to increase the spirit of cooperative federalism. “In order to reduce the burden of rising petrol and diesel prices, the central government reduced the excise duty last November. We had urged the states too to reduce their taxes. Some states reduced the tax and provide benefits to the consumers but some didn’t do so”, said PM Modi during his meeting with Chief Ministers over the Covid situation.

He also cited an example by naming a few Opposition ruled states and said,” I am not criticising anyone but request Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand, Tamil Nadu to reduce VAT now and give benefits to people.”

He said that these states did not follow the advice of the Centre and thus people are burdened with price rises. “I request these states to do now what they should have done in November. By reducing the VAT you can lower the burden faced by the residents”, he added.

Hitting back at Prime Minister Narendra Modi, Maharashtra Chief Minister Uddhav Thackeray said, “Maharashtra gets 5.5 per cent of central tax and the state’s share in total direct tax is 38.3 per cent. Maharashtra collects the highest GST of 15% in the country. Combining both direct taxes and GST, Maharashtra is the number one state in the country. Despite this, the state still owes about Rs 26,500 crore in GST arrears.”

He also launched a scathing attack on the Centre and said that all the states are expected to get equal treatment from the Centre.

Earlier in November, the Central government had reduced excise duty on petrol and diesel by Rs 5 and Rs 10 respectively. Following the Centre’s decision, 25 states and UTs, mostly BJP-ruled had reduced VAT on petrol and diesel to give relief to people.