DNA Exclusive: Analysis of VAT on petrol, diesel in opposition-ruled states

Prime Minister Narendra Modi on Wednesday targeted the opposition-ruled states amid concerns over higher fuel prices and urged them to reduce VAT in the "national interest" to benefit the common man. The PM, according to the news agency PTI, asked those states and the governments there to work in the spirit of cooperative federalism in this time of global crisis.

In today's DNA, Zee News anchor Aditi Tyagi analysed PM Narendra Modi’s appeal to opposition-ruled states to reduce VAT in the ‘national interest’.

PM Modi raised the issue of many states not adhering to the Centre's call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last, and called it an injustice to people living there and also harmful for neighbouring states.

These are the states where there are often demonstrations on expensive oil prices, slogans are raised against the central government, but these states themselves are largely responsible for expensive oil, filling the government treasury by imposing more taxes. 

Today, Prime Minister Narendra Modi held a meeting with the Chief Ministers of the states on the issue of increasing cases of Covid-19. In this virtual meeting, he discussed the prices of petrol and diesel and named many states and requested them to reduce their VAT earnings on petrol and diesel slightly so that the prices can be reduced and the public gets relief. Prime Minister Modi also reminded these states of the federal structure and appealed to work unitedly for the interest of the country.

On November 4 last year, the central government had reduced the excise duty on petrol by Rs 5 and diesel by Rs 10 per litre. This means that the central government had left a large portion of its revenue to benefit the general public.

 

Live TV