(TOI)
Oil minister Dharmendra Pradhan on Wednesday said that petroleum ministry has urged the states to slash VAT (Value Added Tax) on petrol and diesel by 5 per cent, a day after the central government cut excise duty+ on fuel to protect retail consumers from high global crude oil prices.
“States are the biggest beneficiary. They get all of the VAT collection plus they also get 42 per cent of the central excise collections. The amount remaining with the Centre is used to finance centrally sponsored schemes in states,” Pradhan said.
He further added that finance minister Arun Jaitley will write to the chief ministers in this regard. The finance ministry had earlier ruled out lowering excise duty on petroleum products citing pressure on government finances. “By taking cognizance of the whole scenario, the prime minister has given direction to the finance ministry and the oil ministry to look into this aspect and rightly, I don’t see this as an issue of loss or gain,” Pradhan told reporters. “There is about $10 difference between crude oil prices and petroleum prices,” Pradhan said.
