Maharashtra will suffer Rs 2,600 crore revenue loss if it cuts VAT on petrol, diesel

Surcharge and taxes of fuel products is the highest in Maharashtra

The Bharatiya Janata Party-ruled Maharashtra is all set to take a cue from the Union government and cut taxes on petrol and diesel. Maharashtra levies 46.52 per cent VAT across the state and 47.64 per cent in the capital city of Mumbai and a cut in the VAT is expected to lead to a revenue loss of 2,600 crores.

Maharashtra- one of the manufacturer states in the country- is already reeling under heavy losses due to Goods and Services Tax implementation. Following in the footsteps of the Gujarat government, Maharashtra Chief Minister Devendra Fadnavis is also expected to cut down VAT on petrol and diesel to give consumers some respite. But the bearing will be heavy on the exchequer. Currently, Maharashtra levies a surcharge of Rs 11 per litre and Rs 2 per litre on petrol and diesel excluding VAT.

The Maharashtra government is likely to cut Rs 2 on VAT per litre of petrol and diesel. The move comes after the union government cut basic excise duty on petrol and diesel by Rs 2 per litre on October 4. The impact is likely to be felt on Maharashtra's debt stocks which- owing to the Rs 34,000 far loan waiver scheme, is already expected to shoot up to Rs 4.13 lakh crore in Financial Year 2017-18.

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