The central government on November 3 last year announced reduction in excise duty. The government reduced excise duty on petrol by Rs 5 and on diesel by Rs 10. After the announcement of the Center, VAT was reduced in 20 states and six union territories.

Prime Minister Narendra Modi has targeted the opposition over the prices of petrol and diesel. In a meeting with chief ministers on Wednesday, the Prime Minister said that in November last year, the Center had cut excise duty and urged the state governments to reduce VAT as well. But many states did not pay heed to it. Prime Minister Modi called it an injustice to the public.

Know which states cut VAT after the central government reduced excise duty in November? What are the prices of petrol and diesel at present in the states which had cut VAT? What is the price of petrol in the states which have not reduced VAT? What are the prices in the states which Prime Minister Modi mentioned in his address? Is the tax charged by the state governments more than the central excise duty?

How much does the government earn every year from petrol and diesel?

The income of governments from petrol and diesel is increasing every year. Whether it is the central or the state government, there has been a huge increase in the income of both in the last seven years. The total revenue from VAT and sales tax levied by all the state governments is currently about 28 per cent less than the Centre’s revenue from excise duty.

Source: PPAC, the figures for 2021-22 are for the first nine months. All amounts are in crores of rupees.

Which states cut VAT after the central government reduced excise duty?

The central government on November 3 last year announced reduction in excise duty. The government reduced excise duty on petrol by Rs 5 and on diesel by Rs 10. After the announcement of the Center, VAT was reduced in 20 states and six union territories. These included all BJP ruled states. States where VAT was reduced include Uttar Pradesh, Bihar, Madhya Pradesh, Rajasthan, Punjab, Chhattisgarh, Odisha, Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Uttarakhand, Goa, Assam, Arunachal Pradesh, Sikkim, Tripura, Manipur, Nagaland, Mizoram were included. Petrol and diesel prices were also reduced in Union Territories like Ladakh, Chandigarh, Puducherry, Dadra Nagar Haveli, Daman and Diu, Jammu and Kashmir.

Did any non BJP ruled state also reduce the prices?

Along with the BJP-ruled states, some non-BJP-ruled states also reduced the tax rates on petrol and diesel in November-December. The then Congress government in Punjab had reduced the prices of petrol and diesel. The Charanjit Singh Channi government of that time had reduced Rs 10 per liter of petrol and Rs 5 on diesel. Similarly, in Odisha, the Naveen Patnaik government of BJD had reduced VAT on petrol and diesel by three rupees.

On November 16, the Rajasthan government reduced the price of petrol by Rs 4 and that of diesel by Rs 5. After Punjab and Rajasthan, another Congress-ruled state Chhattisgarh also reduced VAT on petrol by one percent and on diesel by 2 percent on 22 November 2021. After this decision, petrol became cheaper by 90 paise and diesel by Rs 1.45 per liter in the state. After about a month, VAT was reduced in the capital Delhi also in December. The 30 per cent VAT on petrol has been reduced to 19.4 per cent.
What are the prices of petrol and diesel at present in the states which had cut VAT?

Last year, the central government had reduced excise duty on petrol and diesel amid rising prices. This happened for the first time in three years. After the relief in November, the prices of petrol and diesel did not increase for 137 days. After the decrease on 3 November, the prices again started rising from 22 March. Prices have increased 14 times in just 16 days and prices in all the states have once again reached the level before government relief in November. At the same time, in the states which did not cut VAT, the prices have gone up by five to six rupees from the level of November.

Which states have not reduced VAT?

The Prime Minister referred to several non-BJP ruled states regarding the high price of petrol and diesel. He said that Maharashtra, West Bengal, Telangana, Andhra Pradesh, Jharkhand, Tamil Nadu and Kerala did not heed the appeal of the Central Government for one reason or the other, the burden on the citizens of these states continued to fall. The Prime Minister referred to several non-BJP ruled states regarding the high price of petrol and diesel. He said that Maharashtra, West Bengal, Telangana, Andhra Pradesh, Jharkhand, Tamil Nadu and Kerala did not heed the appeal of the Central Government for one reason or the other, the burden on the citizens of these states continued to fall. For example, in Mumbai, petrol costs Rs 120 a liter, while the neighboring union territory of Daman Diu costs Rs 102, Modi gave. 111 in Tamil Nadu and 118 in Jaipur is Rs.

What are the prices in the states which Prime Minister Modi mentioned?

How much did the prices change in the states where the BJP government was there?

Is the tax charged by the state governments more than the excise duty from the center?

Excise duty and VAT are important sources of revenue for the central and state governments. This is the reason why governments keep shying away from reducing it. Excise duty on petrol and diesel accounts for about 20 percent of the total revenue of the central government. At the same time, if we talk about the states, 25 to 35 percent of their income comes from taxes on petrol, diesel and liquor. Talking about Delhi alone, the Center and the states together charge about 43 percent tax on petrol and about 37 percent on diesel. According to the price of April 16 in Delhi, excise duty was 27.90 on one petrol. At the same time, the state government was getting Rs 17.13 as VAT on every liter.

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