December 8, 2022

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Rajasthan Government Will Reduce VAT On Fuel: CM Gehlot

Image Courtesy: Hindustan Times

The opposition has put pressure on the state government over the issue after several states, notably Congress-ruled Punjab, reduced the price of petrol and diesel.

Rajasthan Chief Minister Ashok Gehlot stated on Tuesday that his administration will decrease VAT on petrol like other states, just hours after urging the Centre to slash excise duty even further, citing the Covid epidemic as a reason.

On November 3, the Centre lowered excise tax on petrol by 5 per litre and diesel by 10 per litre, providing relief to customers who have been hit by record-high retail petrol costs.

The opposition has put pressure on the state government over the issue after several states, notably Congress-ruled Punjab, reduced the price of petrol and diesel.

The controversy erupted after the Punjab government stated in an advertising that the state’s fuel rates are lower than those in Delhi, Haryana, and Rajasthan.

“When all states have dropped costs, we would have to reduce it as well,” Mr Gehlot said at a progarmme in a Jodhpur village.

“Our government will also bring relief to individuals by lowering the state’s VAT on petrol and fuel,” he stated.

Mr Gehlot, who continues to blame the Centre for rising petrol costs, claims that the Union government “looted” people by imposing large fuel levies.

“They have now provided a meagre relief,” he added, adding that the Centre could lower petrol and diesel prices even more.

Mr Gehlot had earlier in the day urged that the Centre decrease excise duty by 10% on petrol and 15% on diesel in a statement.

If the federal government lowers excise taxes, the state’s VAT will fall by 3.40 percent on petrol and 3.90 percent on diesel. As a result, he said in the statement, Rajasthan is prepared to suffer a revenue loss of Rs 3,500 crore.

According to him, the Centre lowered the state share of fuel excise duty after 2016, and states do not receive any share of the additional or special excise duty levied by it.

“Increasing excise duty unduly first and then lowering it, while concurrently establishing a competitive climate among states to reduce VAT,” Mr Gehlot added, “is against the spirit of cooperative federalism.”

During the coronavirus shutdown, he claimed, the Centre increased the excise duty on petrol by ten percent and on diesel by thirteen percent per litre.

According to Mr Gehlot, the price of petrol will rise by roughly 27 percent in 2021, while the price of diesel will rise by about 25 percent. Only some assistance was granted from the unnecessarily raised additional excise duty, he claimed.

As a result, he added, the Centre’s reduction in excise duty seemed insufficient.

According to the chief minister, VAT on petrol and diesel accounts for about 22% of Rajasthan’s overall revenue.

From January 29, the Rajasthan government decreased VAT by around 3 per litre on petrol and 3.8 per litre on diesel.

According to him, this has resulted in a revenue loss of Rs. 2,800 crore.

According to him, the state’s revenue has decreased by 20,000 crore in this fiscal year so far due to the circumstances generated by COVID-19.

Mr Gehlot ascribed the drop in revenue to the Centre’s failure to reimburse the state for GST of $5,963 crore.

Even in such a situation, he noted, the state administration did not allow progress to slacken by employing effective financial management.

Satish Poonia, the state BJP president, has called the CM’s speech a “nautanki” over the matter.

“The Gehlot administration mocks the Centre for inflation by charging the highest VAT on petrol and diesel and providing overpriced energy. Please end this ruse and provide help to the people of the state who are suffering from inflation “Mr. Poonia sent out a tweet.

“The chief minister of Congress-ruled Punjab is also mocking through ads about pricey fuel and diesel in Rajasthan,” claimed Deputy Leader of the Opposition Rajendra Rathore in a tweet.

“Why is Rajasthan not decreasing VAT while the rest of the country has done so? Muster the fortitude to lower VAT and provide relief to the people “he stated.

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