Days after the Centre cut excise duty on petrol and diesel by Rs 2 per litre, and Union Finance Minister Arun Jaitley wrote to chief ministers, urging states to similarly reduce tax on petroleum products, NDA-ruled Gujarat and Maharashtra and Congress-led Himachal Pradesh slashed VAT on petrol and diesel on Tuesday.
Gujarat and Himachal go to the polls later this year.
The Gujarat government was the first to announce the cut on value added tax (VAT), slashing it by 4 per cent each from the present 24-per cent tax on petrol and diesel. Post-midnight, petrol in the state will cost Rs 67.53 per litre, and diesel Rs 60.77 per litre.
Maharashtra, among states that had previously shot down the Centre’s suggestion of lowering taxes by contending that the state’s exchequer will not be able to bear the loss, effected a VAT cut of Rs 2 per litre on petrol and Re 1 per litre on diesel. After the new rates come into effect, petrol will cost Rs 75.58 per litre and diesel Rs 59.55 in Maharashtra.
Hours later, Himachal Pradesh announced reduction in VAT by 1 per cent each on petrol and diesel. “Currently the state levies 27-per cent VAT on petrol and 16 per cent on diesel. The new rates for petrol will be Rs 68.32 per litre (down from Rs 69.01). Diesel will cost Rs 56.32 (down from Rs 57.09) per litre,” a government spokesperson said.