Maharashtra govt slashes VAT on petrol and diesel; BJP says relief inadequate

Mumbai, May 22: A day after the Centre reduced excise duty on fuel, the Shiv Sena-led Maharashtra government on Sunday reduced the Value Added Tax (VAT) on per litre petrol by Rs 2.08 and diesel by Rs 1.44.

A statement issued by the government said the state exchequer will have to bear an annual loss of Rs 2,500 crore as a result of this decision.

After reducing the VAT on fuel, the per month revenue from petrol will come down by Rs 80 crore, while that from diesel by Rs 125 crore, it said. The central government on Saturday announced a record Rs 8 per litre cut in excise duty on petrol and Rs 6 reduction on diesel.

Meanwhile, senior BJP leader Devendra Fadnavis said the reduction in VAT on fuel done by the Maha Vikas Aghadi (MVA) government was inadequate and termed it as a "cruel joke" played on the people. "An announcement which suits the economic condition of Maharashtra was expected. Our share in the country's GDP is 15 per cent.

The central government was bearing a financial burden of Rs 2,20,000 crore and the state should have borne at least 10 per cent of the burden," the Leader of Opposition in the state Assembly said.

While other state governments were giving relief of Rs 7 to Rs 10 per litre, the Maharashtra government announced a VAT reduction of only Rs 1.5 and Rs 2, he said. "This is a cruel joke on the people. The government should have shown a large heart," the former chief minister added.