End to VAT

by National | 06-10-2017 | 459 views

New Delhi: State Governments have been urged to reduce sales tax or value-added tax on petrol and diesel by five per cent by the central government. Dharmendra Pradhan, Minister for Petroleum and Natural Gas stated that “We have proactively cut excise duty. Now it is the turn of states to reduce VAT. They get all of the VAT collection plus they also get 42 per cent of the central excise collections. The amount remaining with the Centre is used to finance centrally sponsored schemes in states.” Dharmendra also pointed out that the state governments impose VAT as an ad-valorem duty which further increases the price of these two fuels in states, on every occasion the Centre increases the price. He also pointed out that the cut in excise duty on Tuesday lowered the petrol price for consumers by Rs 2.5 per litre and diesel by Rs 2.25 per litre. In June, the government introduced the option of surge pricing, ending the practice of fortnightly revision in rates followed for the last 15 years. This allowed oil companies to fix rates of petrol and diesel in line with the changes in the international oil prices.

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