New Delhi: With elections approaching and Opposition stepping up its campaign against high fuel prices, the Centre has put the ball in the states’ court.
A day after reducing basic excise duty on petrol and diesel the Centre on Wednesday urged states to reduce VAT on fuel by 5 per cent to “help people”. Meanwhile, to drive home the so called attempt to provide relief to “aam admi”, BJP pesident Amit Shah said the Modi government's decision to reduce petrol and diesel prices by Rs 2 shows its priority to giving relief to the common man and farmers at a time when oil price is rising globally.
Union finance minister Arun Jaitley will be writing to all state chief ministers urging them to cut VAT on petrol an diesel.
“We have proactively cut excise duty. Now it is the turn of states to reduce VAT,” said Oil minister Dharmendra Pradhan while briefing the media.
The minister said that unlike the Centre, states levy VAT as an ad valorem duty which rises every time there is an increase in price and the Centre has “sacrificed” Rs 26,000 crore in revenue in the cut in excise duty.
