Union Minister for Petroleum & Natural Gas Dharmendra Pradhan has appealed to the State Governments across the country to slash VAT (Value Added Tax) on petrol and diesel in their respective territories, akin to Centre reducing excise duty on these items.

Steep hike in prices of petrol and diesel, which is being done on a daily basis, has annoyed the common man as vehicle users have swelled in numbers in the recent past.  The BJP-led Centre’s proposal to ‘review’ the prices of fuel on a daily basis from June has made things worse for the people.  In an apparent effort at damage-control, Pradhan said that the Centre had been pro-active in reducing excise duty on fuel.

“We have shown the way for the States to follow suit by reducing VAT in their respective regions; States can consider slashing VAT by 5%,” Pradhan suggested and added that reducing excise duty has put an additional burden of Rs.26,000 crores per annum on the Centre.

“Compared to the Centre, States’ share in profits earned through sale of petrol/diesel is more; they get 42% excise besides collecting 26-38% of VAT.  I appeal to the States to consider slashing VAT by 5%.  I’m sure Union Finance Minister Arun Jaitley would soon write to chief-ministers of all States in this regard,” Pradhan concluded.