22 States, Union Territories Lower VAT On Petrol, Diesel After Central Excise Duty Cut

Twenty-two states and union territories, mostly governed by the Bharatiya Janata Party or its partners, have reduced taxes on auto fuels, following the central government’s excise duty cut.

Among the states and union territories that have cut value-added tax on petrol and diesel are Karnataka, Puducherry, Mizoram, Arunachal Pradesh, Manipur, Nagaland, Tripura, Assam, Sikkim, Bihar, Madhya Pradesh, Goa, Gujarat, Dadra & Nagar Haveli, Daman & Diu, Chandigarh, Haryana, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Uttar Pradesh, and Ladakh, according to a statement by the Ministry of Petroleum & Natural Gas.

The Modi government cut excise duty on petrol and diesel by Rs 5 and Rs 10, respectively, on Diwali eve. The decision came after retail prices scaled new records almost every day on rising crude prices. But prices at the pump had also surged because the government had increased levies on fuel to shore up revenue during the pandemic.

On Nov. 1, the central and state taxes as a percentage of the base price stood at 123.1% for petrol and 93.5% for diesel, according to data available on the Indian Oil Corp.'s website. Following the excise duty cut, that came down to 112.5% and 73.3%.

Retail prices of the auto fuels fell the most in Ladakh by Rs 13.43 a litre, followed by Karnataka (Rs 13.35), and Puducherry (Rs 13.35) after the reduction and excise duty and VAT.

Diesel, too, fell the most in Ladakh (by Rs 19.61 a litre), followed by Karnataka (Rs 19.49) and Puducherry (Rs 19.08).

Fourteen states and union territories have not cut VAT on petrol and diesel. These include Maharashtra, National Capital of Delhi, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, Meghalaya, Andaman & Nicobar, Jharkhand, Odisha, Chhattisgarh, Punjab, and Rajasthan, according to the statement.