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The Maharashtra government on Thursday reduced value added tax (VAT) on petrol by Rs 5 a litre and by Rs 3 a litre for diesel, a move that will cost the state exchequer Rs 6,000 crore on an annual basis.
The decision on reducing the VAT has been taken at a meeting of the Cabinet under newly-appointed chief minister Eknath Shinde.
Following the reduction, every litre of petrol and diesel in Mumbai will now cost Rs 106.35 and Rs 94.28, respectively, from Rs 111.35 and Rs 97.28, as on Thursday.
Sources in the oil marketing companies (OMCs) said that they are yet to receive any notification from the state government in this regard as yet. At retail outlets, fuel prices are generally revised in the morning.
The prices of petrol and diesel vary from market to market due to various factors like freight rates, VAT, local levies, etc. On Thursday, the prices of petrol and diesel in Delhi were Rs 96.72 and Rs 89.62 a litre, respectively.
Apart from OMCs’ cost, dealers’ commission, VAT (collected by the states) and excise duty (collected by the Centre) comprise the final retail price of transport fuels.
Aimed at controlling inflationary pressures due to soaring crude oil prices, the Centre has reduced excise duty on two occasions since November. Through the first one, with effect from November 4, the Centre had reduced excise duty on petrol and diesel by Rs 5 and Rs 10 per litre, respectively. The latest one came in with effect from May 22, in which the duty was reduced by Rs 8 and Rs 6 a litre on petrol and diesel, respectively.
India meets around 85% of its crude requirements through imports.
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Image and article originally from www.financialexpress.com. Read the original article here.