After Centre’s Excise Duty Cut On Fuel, Finance Minister Trains Guns On States

New Delhi: Finance Minister Nirmala Sitharaman said people should ask their state governments about high fuel prices. At a press briefing on Monday night, she asserted that after the Centre’s excise duty reduction on petrol and diesel, the government had appealed to states to cut Value Added Tax (VAT) to further bring down rates.

“Petrol and Diesel can’t be included in Goods and Services Tax (GST) till the GST Council sets the rate for their inclusion,” added the Finance Minister.

Sitharaman was addressing the media following an interaction with chief ministers and finance ministers of the states in a bid to enhance the investment-friendly climate in the country. This is being done “in the wake of strong recovery” and the “opportunities accorded by a shift in the geopolitical realities post-pandemic”.

After widespread criticism over soaring fuel prices, the Centre had cut excise duty on petrol and diesel by ₹ 5 and ₹ 10 per litre respectively just on the eve of Diwali. Several states followed suit by reducing VAT to bring down fuel prices.

However, few states have sought a further reduction in excise duty from the union government. The Kerala Finance Minister, for instance, dubbed the centre’s move “damage control”.

Opposition parties have trained guns on the Modi government saying the government only marginally slashed the excise duty after having hiked them significantly in the past. According to them, state governments did not increase VAT so there’s no question of reducing it.

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