In June 2012, the then Finance Minister Pranab Mukherjee had written to all state Chief Ministers to reduce Sales tax/ VAT levied by states
on petrol and diesel and also convert it into a specific amount per litre instead of being charges on ad-valorem basis.
Minister of State for Finance Namo Narain Meena said the Centre has received the responses from state government of Gujarat and Uttar
"It (Gujarat) expressed its unwillingness to shift to specific duty regime, by pointing out that migration to specific taxation structure
schemes in the time of unusually high prices would be detrimental to the interest of the consumers," Meena said in a written reply to the Lok
The government of Uttar Pradesh has said that the rates of duties levied on petroleum products in UP are already comparable to other states.
State government of Gujarat informed that the rates of VAT on petrol and diesel were already reduced to 3% since June 2008.
Keeping in view financial needs of the state, switching over to specific duty structure does not appear to be possible, Uttar Pradesh had
said in its reply.
The Centre had asked the states to reduce taxes to neutralise the impact of hike in price of petrol. The oil marketing companies had hiked
petrol prices by Rs 7.54 a litre. However, faced with a public outcry over such a steep hike, later the OMCs partially rolled back the hike
by Rs 2.02 per litre.