Reduce VAT on fuel to control prices in national interest: Modi to states

Coming down hard on Opposition-ruled states, Prime Minister Narendra Modi on Wednesday said some states did not reduce VAT on petrol and diesel despite the excise duty cut by the Centre last November and had done "injustice" to the people by not transferring the benefits of the move to them.

Speaking at an interaction with chief ministers on the emerging COVID-19 situation in the country, Modi said he wanted to flag a separate issue of the challenges being faced by the people due to the global situation.

"The situation of war which has arisen, has affected the supply chain, and in such an environment, the challenges are increasing day by day," Modi said in an apparent reference to the Russia-Ukraine conflict.

"This global crisis is bringing many challenges. In such a situation, it has become imperative to further enhance the spirit of cooperative federalism and coordination between the Centre and states," he said.

Flagging the issue of high prices of petrol and diesel, Modi said the Centre had reduced excise duty to reduce the burden of prices of petrol and diesel on the people last November.

He said the Centre had urged states to reduce taxes and transfer the benefit to the citizens.

"Some states reduced taxes but some states did not give any benefit of this to the people. Due to this, the prices of petrol and diesel in these states continue to remain high. In a way, this is not only injustice to the people of these states but it also has an impact on neighbouring states," he said.

Many states such as Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand and Tamil Nadu for some reason or the other did not listen to the central government and the citizens of those states continued to be burdened, he said.

"I request that what should have been done in November, you should pass on the benefit to the citizens by reducing VAT," Modi said.