The Uttarakhand government has decided to reduce the value added tax (VAT) on petrol and diesel by 2%, state Finance Minister Prakash Pant said on Wednesday.
The Central government had earlier instructed the state governments to bring down the taxes to help the consumers.
Uttarakhand is the third BJP ruled state to cut VAT on fuels following the directions of Central government.
On Tuesday, two BJP-ruled states Gujarat and Maharashtra have today slashed the VAT on fuel. While the Gujarat government cut the fuel prices by 4 per cent, the Maharashtra government reduced petrol and diesel prices by Rs 2 and Rs 1 respectively.
The lowering of tax in the state follows Union finance minister Arun Jaitley recently writing to all state governments nudging them to reduce taxes on petrol and diesel.
The Centre had recently brought down excise duty on petrol and diesel by Rs 2 per litre.
However, the Kerala government, led by the Communist Party of India (Marxist) (CPM), objected to the directive, citing that the status is unfavourable to implement the move.