Maharashtra Cuts VAT On Petrol, Diesel Post Centre's Excise Duty Reduction

Just a day after central government announced reduction in excise duty on petrol and diesel, Maharashtra government has gone on to reduce VAT on petrol by Rs. 2.08 and on diesel by Rs. 1.44.

By Mihir Barve

1 mins read

Published on May 22, 2022

Highlights

Maharashtra government has reduced VAT on petrol by Rs. 2.08.
VAT on diesel has gone down by Rs. 1.44.
This will bring petrol to Rs. 109.27 and diesel to Rs. 95.84 in Mumbai.

Following a 2 month long gain on the prices of petrol and diesel, central government announced a reduction in excise duty on petrol by Rs. 8 per litre and diesel by Rs. 6 per litre. Union Finance Minister Nirmala Sitharaman also added that this will bring down the prices of Petrol by Rs. 9.5 per litre and that of diesel by Rs. 7 per litre. However, Chief Minister of Maharashtra Uddhav Thackeray claimed that this reduction in excise duty was not enough, and more needed to be done. Following this, Maharashtra government has announced that it will be reducing the Value Added Tax (VAT) on petrol by Rs. 2.08 per litre and that on diesel by Rs. 1.44 per litre. This reduction will bring down the prices of petrol in Mumbai to Rs. 109.27 per litre, while diesel will be priced at Rs. 95.84 per litre. As a result of this reduction in VAT, Maharashtra government is expected to lose around Rs. 80 crore on taxes from petrol and Rs. 125 crore on taxes from diesel every month. Rajasthan government and Kerala government also announced reduction in VAT, with the VAT in Rajasthan on petrol going down by Rs. 2.48 per litre and the same on diesel going down by Rs. 1.16 per litre, whereas the Kerala government reduced VAT by Rs. 2.41 per litre for petrol and Rs. 1.36 for diesel.