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Rajasthan, Maharashtra and Kerala taking undue credit for fuel prices cut: HS Puri

Our Bureau | | Updated on: May 23, 2022
Union Minister of Housing & Urban Affairs and Petroleum and Natural Gas Hardeep Singh Puri

Union Minister of Housing & Urban Affairs and Petroleum and Natural Gas Hardeep Singh Puri | Photo Credit: -

The reduction has nothing to do with any decision taken by the state governments, says Puri

The Minister for Petroleum and Natural Gas, Hardeep Singh Puri, on Monday said that leaders from Rajasthan, Maharashtra and Kerala are taking undue credit for the reduction in retail prices of petrol and diesel.

“Not entirely surprised to see senior leaders from Rajasthan, Maharashtra and Kerala claiming credit for the actions taken by the Centre and trying to pass off the proportionate reduction in the VAT component due to a cut in Central Excise announced by the Finance Minister, as their own reduction in VAT,” Puri said in a series of tweets.

At present, the Minister is in Davos attending the World Economic Forum (WEF).

“Simply put—VAT is charged on the entire selling price, inclusive of Central Excise. When it is reduced by ₹8 on petrol and ₹6 on diesel, the VAT component is reduced by a proportionate amount of ₹2.25 on petrol and ₹1.17 on diesel in case of Rajasthan as it charges 31 per cent VAT,” he added.

Puri said that the reduction has nothing to do with any decision taken by the State government.

“First they didn’t reduce taxes in November, even as BJP-ruled States did, and now they have gone a step further by claiming undue credit for the reduction announced by the centre. If they are committed to providing relief to the citizens in their States who are still paying over ₹13–15 per litre more than the BJP-ruled States, they must reduce the percentage of VAT,” he said.

On Sunday, Finance Minister Nirmala Sitharaman in a series of tweets said, “Basic Excise Duty (BED), Special Additional Excise Duty (SAED), Road & Infrastructure Cess (RIC) and Agriculture & Infrastructure Development Cess (AIDC) together constitute Excise Duty on petrol and diesel. Basic ED is shareable with states. SAED, RIC, and AIDC are non-shareable.”

The excise duty reduction of ₹8 per litre on petrol and ₹6 a litre on diesel (effective from May 22) has entirely been made in the Road & Infrastructure Cess (RIC). Even in November 2021, the reduction of ₹5 a litre in petrol and ₹10 per litre in diesel was entirely made in RIC, she added.

“Basic ED which is shareable with states has not been touched. Therefore, the entire burden of these two duty cuts (made in November 2021 and May 21) is borne by the Centre,” the FM pointed out.

Published on May 23, 2022
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