Gujarat govt cuts Value-Added Tax on petrol, diesel by 4%

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Petrol and diesel prices have dropped in the global market and the central government has chose to slash prices.

BJP-ruled States of Gujarat and Maharashtra were the first to announce a reduction in taxes on petrol and diesel, heeding the Centre's appeal to further reduce prices of petroleum products for customers.

Earlier, in its effort to bring down spiralling prices, the centre had cut excise duty on petrol and diesel by Rs 2.

Indian states are being asked by the Oil Minister Dharmendra Pradhan and Finance Minister Arun Jaitley to reduce their Value-Added Tax on fuel in order to bring down prices and cushion the impact of rising global prices of petrol and diesel.

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Last week the finance ministry made a decision to cut excise duty Rs 2 per litre on both branded and unbranded petrol and diesel. The government was under pressure from people and as well as the opposition parties for keeping fuel prices high -due to excise duty- while global prices remained low. In an interaction with the media recently, Shivraj Singh Chouhan, Chief Minister of Madhya Pradesh has also hinted towards making such move soon. It has not touched diesel prices, fearing losing revenue to neighbouring states. Today the prices are Rs 68.45 and Rs 57.00 per litre respectively.

Soon after the announcement by the BJP government in Gujarat, CM Fadnavis-led BJP government in Maharashtra too slashed Value-Added Tax prices on petrol and diesel.

Justifying the move, he said there has to be a "uniform tax mechanism" all over the country.

An official of the GST Council, when contacted, said on condition of anonymity that a proposal to include petroleum products in GST has not been discussed at the Council as yet. Consumer interest is top priority. The Central government had earlier instructed the state governments to bring down the taxes to help the consumers.

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