Uddhav Thackeray responds to PM Modi's charge of high fuel prices

Maharashtra Chief Minister Uddhav Thackeray declined to accept Prime Minister Narendra Modi's prayer to reduce VAT (Value-Added Tax) on petrol and diesel prices.

During a virtual interaction with chief ministers on the emerging COVID-19 situation in the country, Prime Minister Narendra Modi on 27 April 2022 urged state governments to reduce VAT on fuel prices.

Modi said that the Centre reduced the excise duty on fuel prices last November and also requested states to reduce tax. "I am not criticizing anyone but request Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand and Tamil Nadu to reduce VAT now and give benefits to people," he said.

Thackeray claimed that the Centre owed Rs 26,500 crore to Maharashtra as GST arrears. This, the Chief Minister claimed, was despite the fact that Maharashtra's contribution in direct taxes is 38.3% and its share in the GST collection is 15%. He said Maharashtra is number one state in the country in terms of direct taxes and GST combined.

Today, the diesel tax share on an litre of diesel in Mumbai is Rs 24.38 for the Center & Rs 22.37 for the state. Petrol tax share is Rs 31.58 as central tax & Rs 32.55 as state tax. Therefore, it's not a fact that the prices have become more expensive due to state, Maharashtra CM Office said.

Thackeray said that to provide relief to the citizens of Maharashtra, the state government has already given tax relief in respect of natural gas. In order to promote the use of natural gas, the rate of VAT on this gas has been reduced from 13.5% to 3%.

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