Jaipur, Sep 9: Following Gujarat and Maharashtra, Rajasthan reduced the VAT on petrol and diesel by 4 per cent. With the latest decision, Rajasthan became the third state in India to reduce the VAT on fuels. According to a tweet by ANI, the new decision will be applicable from midnight of Sunday. In October 2017, the Gujarat government had announced 4 per cent cut in the Value-added Tax (VAT) on the retail price of petrol and diesel responding to the Centre's suggestion amid escalating fuel cost.
The VAT reduction brought down the price of petrol by Rs 2.93 per litre and that of diesel by Rs 2.72 per litre. Reports inform that the move will cost the state exchequer Rs 2,316 crore annually. The state currently, levies 28.96 per cent VAT on petrol and diesel.
After Gujarat, Maharashtra slashed VAT on prices of petrol and diesel by Rs 2 and Re 1 respectively, effective from October 2017. After the new rates come into effect in Maharashtra, petrol was priced at Rs 75.58 per litre and diesel was priced at Rs 59.55 in the state. Before the reduction, Maharashtra charged 25 per cent VAT on petrol in Mumbai, Navi Mumbai and Thane, while the rest of the state paid 26 per cent VAT on it. Meanwhile, on diesel, 21 per cent VAT was levied in Mumbai, Navi Mumbai and Thane and while rest of the state is charged at 22 per cent.