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Gujarat and Uttar Pradesh are unwilling to shift to specific duty from ad valorem on petroleum products.
The response of these States came after former Finance Minister, Pranab Mukherjee, wrote a letter to all Chief Ministers on June 1, requesting them to reduce sales tax/value-added tax and convert it into a specific amount per litre instead of being charged on ad valorem basis.
This information was given by the Minister of State for Finance, Namo Narayan Meena, to the Lok Sabha, in a written reply.
According to the Minister, Gujarat said that the VAT rates on petrol and diesel had already been reduced to 3 per cent since June 2008. The State expressed its unwillingness to shift to a specific duty regime. It pointed out that migration to specific taxation structure schemes in the time of unusually high price would be detrimental to the interest of consumers.
Uttar Pradesh said that the rates of duties levied on products in the State were already comparable to other States. It clarified that keeping in view the State’s financial needs, switching over to specific duty does not appear to be possible.
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