MP, Gujarat agree with fuel VAT slash by states, Kerala objects

The Bharatiya Janata Party (BJP)-ruled states have expressed compliance to the Centre's directive to slash Value-Added Tax (VAT) on fuel in the states, whereas the Opposition-led state governments have differed on the matter.

Gujarat Chief Minister Vijay Rupani on Thursday said that the state government would reduce taxes on petrol and diesel in the next two or three days.

Madhya Pradesh Chief Minister Shivraj Singh Chouhan said that the government will have a serious discussion on the topic, and quipped, "Wait for Diwali!"

However, the Kerala Government, led by the Communist Party of India (Marxist) (CPM) and the Indian National Congress (INC) alliance, objected to the directive, citing that the status is unfavourable to implement the move.

"The State Government's financial status is unfavourable to take the initiative to reduce tax. At this stage, the Centre should reduce the tax," Thomas Isaac, the Finance Minister for the state, told reporters, adding, "the Centre first increased the prices of petrol and diesel, then reduced it by Rs. 2. So, the states had to follow suit. Let the Centre reduce the tax first."

He also accused the Union Government of shirking its responsibility from wrong decisions.

"The Centre must discuss the tax on petrol with states. It is shifting the after-effects of their wrongs on states' shoulders," Isaac said.

On Tuesday, the Centre announced that the excise duty on fuel would be cut, citing that the move was an attempt to "cushion the impact of rising international prices of crude petroleum oil, and petrol and diesel on their retail sale prices".

A day later, Union Petroleum Minister Dharmendra Pradhan asked the states to slash the Value-Added Tax (VAT) on fuel by 5 per cent.

"We urge the states to take the responsibility just like the Centre did, in direction of the consumer interest, so that they get more relief," Pradhan said.