After Centre slashes fuel prices, states reduce tax on petrol and diesel

FM Nirmala Sitharaman, on Saturday (May 21) announced a reduction in excise duty on petrol and diesel by Rs 8 per litre and Rs 6 per litre respectively.

New Delhi: Excise duty on petrol and diesel, on Saturday (May 21) was reduced by the Centre by Rs 8 per litre and Rs 6 per litre respectively. The surprise move was aimed to lessen people’s woes regarding high fuel prices and will cost the Centre around Rs 1 lakh crore revenue per year. Finance Minister Nirmala Sitharaman made the announcement on Twitter along with other statements on curbing inflation and provision of cylinders under the Ujjwala scheme.

Soon after her announcement on fuel prices, other states including Rajasthan and Kerala slashed Value-added Tax (VAT) on petrol and diesel. Rajasthan Chief Minister Ashok Gehlot announced a Rs 2.48 per litre reduction in VAT on petrol and Rs 1.16 per litre reduction in VAT on diesel.

On Twitter, he wrote, “Due to the reduction in the prices of petrol and diesel by the central government, the state government will reduce VAT by Rs 2.48 per litre on petrol and Rs 1.16 per litre on diesel. With this, petrol will be cheaper by Rs 10.48 and diesel by Rs 7.16 per liter in the state.”