New Delhi: Petrol price has been further reduced by as much as Rs 8.7 per litre and diesel by Rs 9.52 in BJP ruled states and Union Territories – from Ladakh to Puducherry – as they matched the central government’s announcement of a cut in excise duty with slashing of local sales tax (VAT) rates.
Buckling under pressure, the Union government had on Wednesday cut excise duty on petrol by Rs 5 per litre and that on diesel by Rs 10 a litre to give reprieve to consumers battered by record-high retail fuel prices.
This announcement was matched by 22 states and Union Territories cutting Value-Added Tax rates in different proportions.
This has led to BJP and its partner ruled states witnessing steeper reductions in petrol and diesel prices in comparison to Maharashtra, Delhi, West Bengal and other states that are governed by other political parties, according to a price chart of different locations prepared by state-owned oil firms.
The additional reduction, on top of the excise duty cut, is the lowest in Uttarakhand because of lower duty cuts and the highest in Ladakh. On petrol, the price reduction over-and-above excise reduction ranges from Rs 1.97 per litre in the case of Uttarakhand to Rs 8.70 in the case of Ladakh.
For diesel, the additional reduction warranted by Value-Added Tax cuts, ranging from Rs 17.5 a litre in Uttarakhand to Rs 9.52 in the case of Ladakh.
The states that extended additional Value-Added Tax benefits are Karnataka, Puducherry, Mizoram, Arunachal Pradesh, Manipur, Nagaland, Tripura, Assam, Sikkim, Bihar, Madhya Pradesh, Goa, Gujarat, Dadra & Nagar Haveli, Daman & Diu, Chandigarh, Haryana, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Uttar Pradesh and Ladakh.
Karnataka saw Rs 8.62 a litre cut in petrol price due to Value-Added Tax reduction and Rs 9.40 in diesel rates, while Madhya Pradesh gave its citizens an additional Rs 6.89 price relief on petrol and Rs 6.96 on diesel. Uttar Pradesh lowered VAT on petrol by Rs 6.96 and diesel by Rs 2.04 a litre.
States that have so far not lowered Value-Added Tax include Congress and its allies ruled Rajasthan, Punjab, Chhattisgarh, Maharashtra, Jharkhand and Tamil Nadu. AAP-ruled Delhi, TMC-governed West Bengal, Left-ruled Kerala, BJD-governed Odisha, TRS-led Telengana and YSR Congress-ruled Andhra Pradesh.
Wednesday’s excise duty cut had translated into a reduction in the price of petrol in the range of Rs 5.7 to Rs 6.35 per litre across the country and diesel rates by Rs 11.16 to Rs 12.88.
Since states charge local sales tax or Value-Added Tax not just on the base price but also on the excise duty levied by the Centre, the total incidence of price reduction was higher than Rs 5 a litre cut in excise duty on petrol and Rs 10 per litre cut in diesel. The reduction was larger in states with higher Value-Added Tax.
In Delhi, the reduction in petrol price was Rs 6.07 per litre, and that on diesel was Rs 11.75, according to the price chart.
