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Gujarat announces 4% reduction in VAT on diesel and petrol

Gujarat announces 4% reduction in VAT on diesel and petrol

Snapshot: The centre’s idea to slash the excise duty on fuel is regarded as a good attempt to reduce the impact of rise in the international prices of crude petroleum oil, petrol and diesel in the country.

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The state Government of Gujarat has officially reduced the Value Added Tax (VAT) on the prices of diesel and petrol by 4%. After the Central government of India has urged the states to slash down the VAT percentage imposed on the fuel prices in their respective states, the Bharatiya Janata Party (BJP) ruled Gujarat state government stepped forward to became the first state to agree with the Central government for the good cause. 

The central government of India has earlier slashed down the excise duty by Rs. 2 on the fuel prices. Now, with the consent of Chief minister of Gujarat Vijay Rupani, the state has passed the idea of cutting down the VAT percentage on fuel and it will be brought into effect from Tuesday midnight. After reducing the VAT percentage, the price of petrol will be decreased by Rs. 2.93, while the price of diesel will be down by Rs. 2.72.

The chief minister of Gujarat had earlier also complemented the central government’s directive to reduce the VAT by 5% and clearly indicated the state’s support to the centre. However, it came up with reducing the VAT percentage by 4%, which is expected to be well received by the state people.

The centre’s idea to slash the excise duty on fuel is regarded as a good attempt to reduce the impact of rise in the international prices of crude petroleum oil, petrol and diesel in the country.

It is clear that the states earn the biggest benefit from the revenues of fuel, as they receive the VAT collection in addition to the 42 percent of the central excise duty. The amount remaining with the centre is used to aid the central sponsored state schemes financially. The petroleum minister Dharmendra Pradhan said that now it is up to state to take the responsibility and join hands with centre for the benefit of the country.

Some states are in the full support to the idea and are looking forward to implementing it in their respective states. While the states like Kerala believes it is an unfavourable move and showed discontent to the idea.

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