Excise move brings down VAT in Maharashtra, Rajasthan, Kerala

New Delhi: The value-added tax on auto fuels in Maharashtra, Rajasthan and Kerala reduced on Sunday following a cut in excise duty by the central government, even as some states cited additional strain on revenues.

Though the Maharashtra government issued a statement on Sunday saying it reduced the VAT by ₹2.08 a litre on petrol and ₹1.44 a litre on diesel, it later clarified that the reduction was reflected naturally because of the ad valorem system of taxation.

“The reduction in the VAT is the natural reduction reflected because of the reduction in the central excise. It will lead to annual losses of ₹2,500 crore to the state exchequer,” said Manoj Saunik, additional chief secretary, finance department.