VAT cut, fuel to cost Re 1 less in Bengal

The Bengal government has announced a reduction in the VAT on diesel and petrol so that prices of the fuel come down by Re 1 per litre from Wednesday.

By Our Special Correspondent
  • Published 12.09.18
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Calcutta: The Bengal government has announced a reduction in the VAT on diesel and petrol so that prices of the fuel come down by Re 1 per litre from Wednesday.

Announcing the cut, chief minister Mamata Banerjee on Tuesday urged the Centre to reduce its taxes on fuel to give common people some relief.

"For the time being, we have decided to slash Re 1 for each litre of petrol and diesel. We also demand that the central government consider cutting down taxes on diesel and petrol to give people some relief," Mamata said at Nabanna on Tuesday afternoon.

Bengal is the third state after Rajasthan and Andhra Pradesh to bring down fuel prices. While Andhra announced a cut of Rs 2 on each litre of petrol and diesel, Rajasthan announced a 4 per cent cut in VAT.

Sources in the Bengal finance department said there would be a commensurate cut in VAT to reduce prices of petrol and diesel by Re 1.

"But the percentage of the cut will be calculated on a daily basis as the price of fuel changes every day. Currently, the state government charges 25 per cent VAT on petrol and 17 per cent VAT on diesel. The new rates will come into effect from tomorrow (Wednesday)," said a source.

The chief minister blamed the Centre for the spiralling fuel price in the country.

"The Centre has increased the taxes of diesel and petrol in the past few years, leaving common people in real trouble. Price of petrol was Rs 65.12 in January, 2016, and now, it reached Rs 81.60. But everybody should know we never increased tax on petroleum products," said Mamata.

The chief minister said her government had done its best to give relief to common people.

"A sum of Rs 48,000 crore is deducted from our coffers to repay past loans. But still, we have come forward to give some relief to people. Only a couple of poll-bound states like Rajasthan decided to cut down fuel prices by reducing tax," she said.

According to senior finance department officials, the state government is likely to suffer a loss of about Rs 400 crore if the relief continues for the remaining part of the 2018-19 financial year.

The finance department officials said had the chief minister announced a fixed cut in the VAT (like Rajasthan pegged it at 4 per cent), the consumers could have benefited more.