Gujarat Chief Minister Vijay Rupani today (10 October) said, “We are cutting down the VAT on fuel by 4 per cent. Hence, the price of petrol will come down by Rs 2.93, and that of diesel by Rs 2.72”. Complying with the Centre’s directive to reduce the Value-Added Tax (VAT) on fuel in states, Rupani said that his government would reduce taxes on petrol and diesel in the coming days.

Yesterday (9 October), Union Petroleum Minister Dharmendra Pradhan had asked state governments to reduce VAT on fuel by 5 per cent.

Similarly, Maharashtra too, has decided to reduce VAT on fuel in the state. Finance Minister Sudhir Mungantiwar said that the decision was taken in the cabinet today. Petrol will be cheaper by Rs 2 and diesel by Re 1 in the state.

Reduction in VAT will result in a loss of Rs 3,067 crore a year – Rs 940 crore on petrol, Rs 1,075 crore on diesel and Rs 1,052 crore on central taxes.

Maharashtra levies 25 per cent VAT on petrol in Mumbai, Thane, and Navi Mumbai and 26 per cent across the rest of the state along with a surcharge of Rs 11 a litre across the state. For diesel, the VAT levied is 21 per cent in Mumbai, Thane and Navi Mumbai, and 22 per cent across the rest of the state with a surcharge of Rs 2 a litre across the state.

Fuel cesses net more than Rs 19,000 crore for the state.