While the Maharashtra government is under tremendous pressure for the reduction of the value-added tax (VAT) on petrol and diesel, the state is also in a fix over the losses it incurred due to the Central government’s decision of reducing central taxes last month.
After the Central government reduced its taxes on petrol and diesel by ₹5 and ₹10 ahead of Diwali on November 3, the state government’s VAT, which is levied on an ad Valorem (according to value) basis automatically reduced by ₹1.19 and ₹2.41 a litre on petrol and diesel respectively. This has led to the estimated losses to the exchequer by around ₹1,700 crore between November 2021 and March 2022.
Losing business to neighbouring states
