States ‘making a killing’ with VAT on fuel, must cut it: Union minister Hardeep Singh Puri

NEW DELHI: Union minister Hardeep Singh Puri on Friday slammed the opposition ruled state governments for not reducing value added tax (VAT) on petrol and diesel while the Centre has reduced the excise duty when required. Puri alleged that such states are “making a killing” and they should reduce their VAT by 50% to give relief to the common man.
Speaking at Times Network India Economic Conclave, Puri said, “I want to understand how you can criticise the Centre on fuel pricing when your own VAT rate is exorbitant?”
Puri said the petrol price was deregulated in 2010 when Congress government was in power and deregulation of diesel prices was done in 2014 during the NDA government. He added while the Centre collects excise duty, the states collect VAT. Puri claimed that the excise duty was increased during the pandemic for a peculiar reason to meet the requirement that emerged due to the Covid-19. Later, the Centre reduced the excise duty and BJP- states also reduced their VAT corresponding with Centre.
“But in non-BJP states, you charge Rs 35 as VAT. One state charges 26% VAT and another Rs 10 additional tax; another one charges 31% VAT. This means if the international price of crude was $50 a barrel, which it was ages ago, you were still charging 32%. When the prices are $100 a barrel still you are charging 32%. So, they are making a killing. I can understand why they are charging high. They need revenue. But explain to me how can you at the same time bring down the duty on imported liquor from 300% to 150%?” Puri asked.
Puri said India will survive this current situation. “However, we need to make sure that hard actions are taken on fuel front and those actions need to be in consonance between state and Centre,” he said.

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