Non-BJP states under pressure to cut VAT on petro products

After many BJP-ruled states reduce d value-added tax (VAT) on petroleum products, NDA-ruled Bihar and Oppositionruled states have now come under pressure to follow suit. Karnataka, Andhra Pradesh and West Bengal governments, which had cut the taxes last month, seem to be in a fix now.

Sources said Bihar Chief Minister Nitish Kumar is planning to slash taxes on petrol and diesel soon. The remaining state governments are also under pressure to do so.

Hectic parleys were going on in Odisha government to explore how the state VAT could be reduced. The state is going for Assembly elections alongwith Lok Sabha elections early next year and there is a feeling within the ruling Biju Janata Dal (BJD) leadership that it should not allow the BJP to derive political mileage on the issue. The West Bengal government, sources said, is not clear on the issue. The state government had last month reduced the state taxes bringing down the petro prices by Re 1 per litre. The Karnataka and Andhra Pradesh governments are also in a fix as they had already cut it by Rs 2 last month. In Punjab, the state government is assessing the implications and impact of the Centre’s suggestions to the states on reducing fuel prices. Delhi BJP chief Manoj Tiwari has demanded that Chief Minister Arvind Kejriwal reduce VAT on petrol and diesel forthwith. Soon after Union Finance Minister Arun Jaitley announced that the Centre has reduced fuel prices by Rs 2.50 per litre, the states where the BJP is in power immediately announced a cut of another Rs 2.50 per litre. Thus, the rates came down effectively by Rs 5 in these states. Jaitley has written to the states asking them to make a matching reduction. He also reminded that when the Centre cut taxes on fuel in October last year, only states ruled by the BJP-led NDA had announced matching cut in the state taxes.