Kolkata: Following the footsteps of Rajasthan and Andhra Pradesh, Trinamool Congress-led West Bengal government on Tuesday announced reduction on Value Added Tax (VAT) on petrol and diesel by Re 1 per litre in the state.
Making the announcement, Chief Minister Mamata Banerjee also urged the Centre to reduce the cess on fuel prices.
“For the time being, we have decided to slash one rupee for each litre of petrol and diesel. We also demand that the central government consider cutting down the cess on diesel and petrol prices,” Banerjee told reporters at the state secretariat.
The Trinamool Congress (TMC) supremo alleged that the BJP-led central government hiked excise duty nine times, even when the global crude prices were falling.
“Our government has never increased the sales tax or cess during all these years,” she said.
The announcement by Banerjee comes a day after the Congress-led opposition called for ‘Bharat Bandh’ which evoked a mixed response across the nation, and largely remaining ineffective.
Yesterday, Andhra Pradesh Chief Minister N. Chandrababu Naidu had announced reduction in VAT on petrol and diesel by Rs 2 per litre effective from Tuesday.
On Sunday, Rajasthan Chief Minister Vasundhara Raje announced a four-per cent reduction in VAT on petrol and diesel, which will reduce their prices by Rs 2.5 per litre in the state.
VAT on petrol will be reduced from 30 to 26 per cent and on diesel from 22 to 18 per cent, Raje announced at a public meeting organised in Rawatsar in Hanumangarh district as part of her ‘Rajasthan Gaurav Yatra’.
The Narendra Modi government has expressed its inability to control the spiralling fuel prices, attributing the issue to the strengthening US Dollar and other global factors.
The petroleum needs in the world today is facing severe crisis due to non-availability in the international market, Union Law Minister Ravi Shankar Prasad said on Monday.
Meanwhile, news agency quoted an official on Monday saying that the central government has no plans to reduce taxes on petrol and diesel in near future as neither the Centre nor some states can afford to suffer revenue loss from such a move.
The official said that if the central government cuts excise duty on petrol and diesel, it will impact the fiscal deficit. On the other hand, states like Bihar, Kerala and Punjab are not in a position to cut sales tax (or VAT).
The government, he said, anticipates that international oil prices, which together with a drop in the value of rupee has been fuelling the fuel price rise to record levels, will moderate in coming days to take pressure off.
The petrol and diesel prices, on the other hand, continued to skyrocket on Tuesday as well. In Delhi, petrol price reached Rs 80.87/litre and diesel was at Rs 72.97/litre; both registering an increase by Rs 0.14/litre from Monday. In Mumbai, petrol is priced at Rs 88.26/litre, showing an increase of Rs 0.14/litre while diesel price touched Rs 77.47/litre which is an increase of Rs 0.15/litre.
Breaching the psychological barrier of Rs 90, petrol prices in Maharashtra’s Parbhani touched Rs 90.11 on Tuesday.
The spike in prices has renewed calls for cut in excise duty but Finance Minister Arun Jaitley has remained non-committal, saying international oil prices are volatile and have not shown any linear movement.
The Central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.
This led to its excise collections from petro goods more than doubling in the last four years — from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18. States saw their VAT revenue from petro goods rise from Rs 1,37,157 crore in 2014-15 to Rs 1,84,091 crore in 2017-18.