Maharashtra, Rajasthan and Kerala have decreased VAT on petrol and diesel after Finance Minister Nirmala Sitharaman’s call to provide further relief to consumers following a cut in excise duty by the Centre, though some other states appeared reluctant citing their inability to take more strain on revenue.
Senior Congress leader P Chidambaram on Sunday wondered whether the states can afford to give up revenue from the Value Added Tax (VAT) on petrol and diesel unless the Centre devolves more funds or gives them more grants, likening their situation to being between “the devil and the deep sea”.
The Shiv Sena-led Maharashtra government slashed the VAT on petrol by Rs 2.08 per litre and diesel by Rs 1.44 per litre. A statement issued by the government said the state exchequer will have to bear an annual loss of Rs 2,500 crore as a result of this decision.
