Petrol rates lowest in state: Parrikar

Petrol rates lowest in state: Parrikar

Petrol rates lowest in state: Parrikar

On the other, the soaring fuel prices have also anxious the dealers of petroleum products. The net impact of Tuesday's excise duty cut effective from Wednesday on prices is a Rs2.5/litre reduction on petrol and Rs2.35/litre reduction on diesel in Delhi, the minister said. Minister Dharmendra Pradhan has said that Union Finance Minister Arun Jaitley would soon write to all chief ministers asking them to reduce the state tax on fuel.

Talking about the GST on petroleum products, the minister said, "I believe that petrol, diesel and gas should be brought under the ambit of the GST structure". As of now, more than half the state government in India are either by the BJP or supported by the party.

Politics and populism have pushed the Modi government to cut the basic excise duty on petrol and diesel by Rs 2 per litre each earlier this week. But consider this: the moneys they collect by taxing fuels is rarely being seen to be used for welfare schemes or infrastructure upgradation, whatever be the governments' contentions. The VAT rate on petroleum products in states varies from 16 to 47 percent.

Pradhan said the Centre has sacrificed Rs26,000 crore in revenue by the cut in excise duty.

State finance minister Jayant Malaiya said he would attend a GST Council meeting this week "where I will discuss the plan to cut 5% Value-Added Tax on petrol and diesel".

Also Read: Despite duty cut, Centre's oil revenue set to rise 13%. However, what remains unsaid is that there have been windfall gains as taxes on petroleum products are a cash cow for both the Central and State governments. This will make petrol and diesel cheaper. In 2016-17, the central government got a dividend of Rs 61,032 crore, while state governments got Rs 183 crore. By doing this, we will loose around Rs 2,000 crore revenue that includes Rs 800 crore and Rs 1,200 crore from petrol and diesel respectively.

Related news