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The value-added tax levied on petrol and diesel will get reduced automatically in a proportionate manner after the relief in excise duty on the transportation fuels announced by the Centre, Rajasthan Chief Minister Ashok Gehlot said on Thursday.

The CM demanded further reduction in the excise duty on petrol and diesel for providing relief to people from the rising inflation . He also asserted the Congress government in Rajasthan is “ready to bear revenue loss for public welfare".

Also Read: Kerala govt stand not to cut taxes criticised by Congress-led UDF and BJP

With the Centre cutting excise duty on petrol by 5 per litre and on diesel by 10 per litre, the VAT rate on petrol will get reduced by 1.8 per litre and 2.6 per litre on diesel automatically, the Rajasthan Chief Minister said.

This way, petrol will be cheaper by 6.8 per litre and diesel by 12.6 per litre in Rajasthan. The state will lose 1,800 crore VAT revenue, he underlined.

“I would once again urge prime minister (Narendra Modi) to reduce excise duty so that people can get the relief from rising inflation. Our government is ready to bear the revenue loss for public welfare," Gehlot said.

Gehlot assured it will be ensured that the people get direct benefit of reduced fuel price with the help of district administration, oil companies and petrol pump dealers.

The Rajasthan CM said the state had reduced VAT by 2 per cent in January 2021, which led to a loss of 1,000 crore revenue.

Now, with a loss of 1,800 crore VAT revenue following the Centre's decision, Rajasthan is staring at a total loss of 2,800 crore revenue earned from VAT on fuel, he added.

Also Read: Excise duty relief on petrol, diesel to cost 45,000 cr to exchequer: Nomura

The excise duty on petrol and diesel was cut by a record 5 and 10 per litre respectively to help bring down rates down from their highest-ever levels.

The reduction follows an unrelenting hike in international oil prices pushing pump rates across the country to their highest-ever levels. While petrol is above 100-a-litre-mark in all major cities, diesel has crossed that level in more than one-and-a-half dozen states.

Several BJP-ruled states and Bihar, where the BJP is part of the ruling coalition, also reduced VAT rates. It comes on the eve of Diwali which will help bring down the skyrocketing prices of fuel and provide some relief to the common man battling inflation.

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