Mumbai: Maharashtra government on Tuesday cut petrol and diesel prices by up to Rs 3 per litre. The state that levies highest rate of value added tax, VAT, on petrol and diesel has taken a cue from neighbouring Gujarat that on Tuesday announced a 4 per cent reduction in VAT on these two essential fuels.
The VAT rate on petrol and diesel is highest in Maharashtra with the state levying 46.52 per cent VAT which is 47.64 per cent in Mumbai.
The state decided to lower the fuel rates effective midnight on Tuesday, news agency Asian News International reported. Earlier in the day Gujarat chief minister Vijay Rupani told the mediaperson the cut in VAT on petrol and diesel was in line with the central government's instructions to all state governments.
The central government had last week announced a cut in basic excise duty on petrol and diesel by 2 per cent making these two essential fuels cheaper by Rs 2 across the country.
"After the central government's instructions, Gujarat has decided to reduce VAT on petrol and diesel by 4 per cent from today midnight," Rupani told the media early in the day.
Last week, Finance Minister Arun Jaitley in a series of tweets had said cut in basic excise duty was brought in with an aim to give relief to the common man and that the move was pro-people and pro-common man. It also wanted to leave people with more money in their hands. "Now it is up to state governments if they are concerned with the issue (to cut sales tax or VAT)," Jaitley had said.