Maharashtra cuts sales tax on petrol, diesel

The Maharashtra government today decided to reduce sales tax on petrol and diesel to cushion consumers from the recent hike in prices of petroleum products announced by the central government.

In Mumbai, the sales tax has been cut from the present 30 per cent to 28 per cent on petrol, and on diesel from 34 to 33 per cent. This will effectively bring down the prices of petrol and diesel by 80 paise and 30 paise respectively.

In other parts of the state, sales tax has been reduced from 29 per cent to 27 per cent on petrol, and from 31 per cent to 30 per cent on diesel.

The decision to this effect was taken at the state Cabinet's weekly meeting on Wednesday.

Addressing a press conference after the meeting, Chief Minister Vilasrao Deshmukh said that the state got around Rs 5,700 crore from the sales tax on petroleum products and was expecting an incremental revenue of around Rs 350 crore after the central government announced the hike in fuel prices.

This reduction in the sales tax rate would become applicable from Thursday, Deshmukh said. Answering another question, he said, "The recent hike in prices of petroleum products, will increase the state government's expenditure marginally."

Contrary to Monday's buzz in the state's political circles, there was no opposition from the Nationalist Congress Party (NCP) ministers to the decision to cut sales tax.

Meanwhile, State Finance Minister Jayant Patil denied press reports that the NCP was averse to the idea of a reduction in sales tax.

A senior official from the finance ministry pointed out: "The real answer to the whole issue of reducing the tax burden on petroleum products lies in bringing petroleum products into the ambit of Value Added Tax. But this will happen only if the central government assures the state government that it will compensate the loss to state exchequer, something the Centre is not ready for at the moment."

KEEPING TRACK

HARYANA
The Congress government has decided not to charge value added tax (vat) on the increased prices. A decision to this effect was taken at a meeting of the state cabinet presided over by chief minister bhupinder singh hooda, an official spokesman said.

UTTARANCHAL
Prices of petrol and diesel came down marginally in uttaranchal after the state government decided not to impose vat on the increased component.