Petrol and Diesel price may fall further; VAT to be slashed

Commuters may get the good news again with the ongoing discussion of slashing VAT or sales tax on petrol and diesel by 5% after which price of both will fall more.

After cutting excise duty by Rs 2 per litre, the Centre now wants states to cut sales tax or VAT. Finance minister Arun Jaitley is going to write to all state chief ministers urging them to cut VAT on petrol and diesel, oil minister Dharmendra Pradhan told reporters.

“We have proactively cut excise duty. Now it is the turn of states to reduce VAT,” he said.

The centre sacrificed Rs 26,000 crore in revenue due to cut in excise duty.

“States are the biggest beneficiary. They get all of the VAT collection plus they also get 42% of the central excise collections. The amount remaining with the Centre is used to finance centrally sponsored schemes in states,” he said.