Winning Bizness Desk

Mumbai. The Maharashtra government on Sunday reduced Value Added Tax (VAT) by 2.08 per liter and 1.44 per liter on petrol and diesel respectively. The government said that the cut would be implemented with immediate effect. The move by the Maharashtra government comes a day after the Center reduced the excise duty on petrol and diesel by 8 and 6 per litre. The Maharashtra government also said that it is expected to incur a loss of around 80 crore on petrol and 125 crore on diesel every month. Accordingly, the government will have a revenue deficit of about Rs 2,500 crore annually. After the reduction in excise duty in Mumbai and the decision to reduce VAT, the cost of one liter of petrol has gone up to 109.27 and one liter of diesel to 95.84.

Rajasthan and Kerala already reduced VAT

Earlier in the day, the Rajasthan government had announced reduction of VAT on petrol by 2.48 per liter and on diesel by 1.16 per liter. The Kerala government has also cut state tax of Rs 2.41 on petrol and Rs 1.36 on diesel. Petrol and diesel prices have come down by 9.5 per liter and 7 per liter due to reduction of custom duty by the Centre. Now states have also started reducing VAT, due to which the prices of petrol and diesel in those states have come down even more.

Govt had cut tax during Diwali

Earlier on November 3 last year also, the petrol and diesel government had reduced the excise duty on petrol by Rs 5 and diesel by Rs 10. According to government sources, the then opposition-ruled states did not reduce VAT. Maharashtra, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala and Jharkhand earned Rs 11,945 crore from VAT.