The Gujarat government on Tuesday announced a 4 per cent cut in Value Added Tax (VAT) on petrol and diesel, effective from midnight, to bring down fuel prices in the state.
Chief Minister Vijay Rupani told the media here: “With the reduction in VAT, petrol price will be reduced by Rs 2.93 a litre and that of diesel by Rs 2.72 a litre.”
The reduction comes after the state government cut prices of auto fuel by 60 paise soon after the Centre’s decision to reduce basic excise duty by Rs 2 per litre from October 4.
Rupani said the slashing of VAT would put a burden of Rs 2,316 crore a year on the state exchequer. Gujarat annually earns Rs 12,000 crore by way of VAT on auto fuels.
Deputy Chief Minister Nitin Patel said the decision had been taken keeping in view the finances of the public transport system, particularly the state transport buses which depend largely on diesel.
“The decision will provide a big relief to the middle class during Diwali festival and vacation,” he said.
Reacting to price cuts, Congress spokesperson Shaktisinh Gohil said this was an eyewash in view of the forthcoming elections.
“You looted people over not just last three-and-a-half years but in the last 22 years by not cutting taxes. Now that elections are near, you are talking of bringing down prices. If the BJP thinks it can fool the people, they are mistaken,” Gohil said.