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Gujarat govt cut VAT on petrol, diesel with an eye on polls: Congress

Gujarat today reduced the value added tax (VAT) on petrol and diesel by 4 per cent

Press Trust of India  |  Gandhinagar 

Gujarat Elections
The state earns around Rs 12,000 crore per annum through VAT. Because of the reduction in VAT, the state government now stands to lose out Rs 2,316 crore annually.

In a pre-bonanza for people of the poll-bound Gujarat, the state government today reduced the value added (VAT) on petrol and diesel by 4 per cent.

The Opposition cried foul, alleging that the step has been taken by the government with an eye on the upcoming state poll and is a result of the pressure built up because of the response to Vice-President Rahul Gandhi's campaign tour in the state.

"After the central government's instructions, has decided to reduce VAT on petrol and diesel by 4 per cent from today mid-night," Chief Minister said at a press meet here.

With this rate cut, the price of petrol will come down by Rs 2.93 and that of diesel by Rs 2.72 in the state, he said. The effective price of petrol in from mid-night today will be Rs 67.53 per litre and that of diesel Rs 60.77 per litre, the chief minister said.

The state earns around Rs 12,000 crore per annum through VAT. Because of the reduction in VAT, the state government now stands to lose out Rs 2,316 crore annually.

The government earlier used to charge 24 per cent VAT on petrol and diesel and an additional 4 per cent cess. Now, the effective VAT will be 20 per cent plus the 4 per cent cess.

The last time the state government had hiked VAT on fuel was in January 2016 when the international crude prices were falling.

"We have taken this decision in the interest of the people. The decision should not be considered to have any links with the polls. This is only aimed at giving relief to the people and it is a permanent decision," Rupani said.

The lowering of in poll-bound 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 the excise duty on petrol and diesel by Rs 2 per litre.

"The rate reduction has been done with an eye on polls. They (government) have come under pressure after looking at the response Vice-President has been getting during his campaign tour in Gujarat," Congress' spokesperson Shaktisinh Gohil said.

First Published: Tue, October 10 2017. 15:51 IST
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