Dharmendra Pradhan hopes states will reduce VAT on petroleum products

Petroleum and Natural Gas Minister Dharmendra Pradhan on Friday hoped all states will reduce Value Added Tax (VAT) by five per cent on petroleum products.

Talking to reporters here after meeting Bihar Chief Minister Nitish Kumar, Pradhan said,"Considering the interests of the consumers, the Government of India has reduced excise duty on petrol and diesel by Rs. 2 per litre. We have appealed to all the state governments to cut Value Added Tax (VAT) by five per cent on petroleum products."

He appealed to state governments to reduce VAT as per their budget to provide relief to consumers.

"Various state governments are being run by different parties. The Centre and each state levy a tax on petroleum products. The collected tax is used for the development of that state. The VAT rate on petroleum products in states varies from 16 to 47 percent. I have urged all chief ministers to reduce VAT and am hopeful that all the states, including Bihar, will consider it as per their budget," Pradhan said.

The Centre reduced the basic excise duty rate on petrol and diesel to cushion the impact of the rise in international crude prices.

Currently, an excise duty component of Rs 21.48 per litre is levied upon petrol, and consequent to the reduction in excise duty, this will come down to Rs 19.48.

Since 2015, the National Democratic Alliance (NDA) government at the Centre has hiked excise on petrol by Rs. 12 per litre, and on diesel by over Rs 13 per litre in installments.