Following the decision of the Government of India to significantly reduce Central Excise Duty on Petrol and Diesel by Rs. 5 & Rs. 10 respectively, 22 states/UTs have also undertaken commensurate reduction of VAT on Petrol and Diesel to give relief to consumers.
However, there are States/UTs which have not undertaken any reduction in VAT in Petrol and Diesel so far. These are: Maharashtra, NCT of Delhi, West Bengal, Tamil Nadu, Kerala, Meghalaya, Jharkhand, Chhattisgarh, Punjab and Rajasthan. Most of these states are those ruled by other parties than the BJP and the leaders of these parties had been crying foul over steep rates of petrol and diesel and when it comes to reduction in Value Added Tax (VAT) on petrol and diesel, they simply do not seem to care.
The most reduction in the Petrol prices has been in UT of Ladakh, followed by Karnataka and Puducherry. The prices of Petrol in these UTs/state have come down by Rs 13.43, Rs 13.35 and Rs 12.85 respectively. For Diesel, the most reduction has been undertaken by UT of Ladakh, leading to price coming down by Rs 19.61 per litre there, followed by Karnataka and Puducherry
On Diwali eve, the Government of India had taken a significant decision of reducing Central Excise Duty on Petrol & Diesel by Rs. 5 and Rs. 10 respectively. The reduction in excise duty on diesel was double than that of petrol. The Indian farmers have, through their hard work, kept the economic growth momentum going even during the lockdown phase and the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season, was the government thinking behind this.
In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure. The world has also seen shortages and increased prices of all forms of energy. The Government of India made efforts to ensure that there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet our requirements.
Driven by the enterprising ability of India’s aspirational population, the Indian economy has witnessed a remarkable turnaround post the COVID-19 induced slowdown. All sectors of the economy – be it manufacturing, services or agriculture – are experiencing significant upward economic activity. To give a further fillip to the economy, the Government of India had decided to significantly reduce the excise duty on diesel and petrol.
The reduction in excise duty on Petrol and Diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes. This decision is expected to further spur the overall economic cycle. States were further urged to commensurately reduce VAT on Petrol and diesel to give relief to consumers.