Jaipur: In a large assistance for residents who were shaken under inflation, the Country Cabinet met on Tuesday decided to reduce VAT of Rs 4 per liter on gasoline and Rs 5 on Diesel.
The decision will take effect on Wednesday and the cost of the State Cost of Rs 3,500 Crore.
Effectively, VAT on gasoline will decrease by 4.96% to 31.04% from 36% and the state tax diesel will fall 6.7% to 19.30% from 26%.
For consumers, gasoline prices will drop from Rs 111.10 per liter to 107.10 and diesel prices will go down to Rs 90.71 from Rs 95.71 per liter according to the price of Tuesday.
Apart from the possibility of 1,800 crore rs losses with state revenues due to reducing customs for gasoline and diesel by the central government, the cabinet made this decision by considering the government’s interests, a government statement said.
Because of the increase in the increase in gasoline and diesel prices by petroleum companies, assistance provided by the central and state governments in ordinary people had diminished, the meeting was chaired by the Chief Minister of Ashok Gehlot, noted.
The central government has consistently reduced basic customs for automatic fuel from 2016 and its part of the pond shared with the state.
Because of this, the country’s part has fallen.
Special customs and additional customs, while it has been continuously improved.
But countries don’t get part of this.
This step by this center is contrary to the spirit of financial federalism, the meeting said.
Following Covid locking on May 6, 2020, the central government has increased customs in gasoline by Rs 10 / L and Diesel of Rs 13.
This year the price of gasoline has increased around Rs 27 and Diesel around Rs 25.
The center recently announced assistance on gasoline by Rs 5 and Diesel by Rs 10 by reducing customs.
Customs reduction in the middle is not enough and the public will not get permanent help from it, the meeting said.
It noted that excise tasks increased in the middle during the Covid period had been significantly reduced, while VAT increased by the state government had almost returned to the pre-corona period.
It was also told that VAT on gasoline and diesel accounted for more than 22% of the total state tax revenue.
Because of global pandemic, there has been a large reduction in state revenues by Rs 20,000 Crores until October in the current financial year.
Non Replacement Rs 5,963 Crore by Center to Rajasthan also results in a large income deficit.
The cabinet said that to provide real assistance to ordinary people, it is necessary that the central government must reduce additional customs and basic excise duties that go to the central pond.