Published: Thu, October 12, 2017
World | By Melba Underwood

Petrol cheaper by Rs 2, diesel by Re 1

Petrol cheaper by Rs 2, diesel by Re 1

To a query whether Karnataka will follow Gujarat and Maharashtra which slashed sales tax on petrol and diesel, Siddaramaiah replied in the negative.

Uttarakhand Finance Minister Prakash Pant announced on Wednesday that the state government has chose to cut the cess and Value Added Tax on fuel by 2% each, ANI reported.

With this rate cut, the effective price of petrol in Gujarat from midnight of 10 October will be Rs66.53 a litre and that of diesel Rs60.77. The state also collects Rs 11 per litre and Rs 2 per litre as surcharge on petrol and diesel, respectively. The reduction comes after the state government cut prices of auto fuel by 60 paise soon after the Centre's decision to reduce basic excise duty by Rs 2 per litre from October 4.

State finance minister Sudhir Mungantiwar termed the cut as a "Diwali gift" to people of the state. "The Chief Minister has approved a proposal to reduce the Value-Added Tax on petrol and diesel by Rs 2 and Re 1 a litre, respectively". Petroleum Minister Dharmendra Pradhan has recently been rallying for the inclusion of petrol and diesel under the ambit of GST, claiming it is the only way to have a "rational price mechanism in petroleum products".

Because of this move, the state government will suffer a loss of Rs 2,316 crore annually. "If the price of fuel has to be reduced further, then it will have to be done by the Centre", he said.

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Gujarat and Maharashtra have already done the central leadership's bidding while Chhattisgarh has sought exemption on the ground that Value-Added Tax is already low in the state.

Despite the advent of the Goods and Services Tax (GST) regime, products such as motor spirits, aviation turbine fuel (ATF) crude, natural gas and liquor continue to attract VAT.

Data of Indian Oil showed that on Wednesday - if compared with previous day, petrol prices were higher by 3 paisa in New Delhi at Rs 68.48 per litre, Kolkata at Rs 71.26 per litre and Chennai at Rs 70.96 per litre. "This pushed up prices of petrol and diesel by almost 50 per cent for every litre in the state". He added the decision will cause an annual revenue loss of Rs 2,000 crore to the state exchequer.

Petrol and diesel rates surged to a three-year high across the country.

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