Bhubaneswar: The Odisha government has begun consultations on further reducing the Value Added Tax (VAT) on petrol and diesel after Prime Minister Narendra Modi appealed to Opposition-ruled states to reduce VAT on fuel “in the spirit of cooperative federalism”.
In a meeting with chief ministers on Wednesday, which was attended by Odisha Chief Minister Naveen Patnaik, Modi pointed out that states which had lowered VAT have lower fuel prices.
“Let me give you a small example. The Centre reduced the excise duty on petrol and diesel last November to reduce the burden on citizens. We also requested states to reduce their taxes and transfer the benefit to people. Some states reduced taxes but some states did not give any benefit from this to people. Due to this, the prices of petrol and diesel in these states continue to remain high. In a way, this is not only an injustice to the people of these states but it also has an impact on neighbouring states,” Modi said.
“For some reason, states like Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala and Jharkhand did not agree to slash VAT on fuel. The burden of high prices continued to stay on the citizen,” he said.
Though Modi did not mention Odisha, the state government has begun consultations on whether VAT on fuel can be reduced further.
