FUEL PRICE WAR

discuss the Covid-19 situation but the prime minister touched upon other issues. It was not a conversation but a monologue where non-BJP-ruled state chief ministers were taunted. It was not expected of the prime minister. The PM had one approach for BJP CMs and another for non-BJP CMs. The PM must have a uniform stance for the country, which was not seen yesterday,” he said.

Hitting out at the PM, chief minister Uddhav Thackeray on Wednesday said it was unfair to blame Maharashtra for the high fuel prices in the state as the difference between the state and Central taxes on petrol and diesel was negligible. He also said the Centre was giving stepmotherly treatment to Maharashtra.

The state cabinet on Thursday did not discuss reduction of VAT on fuel, though deputy chief minister Ajit Pawar (who heads the finance department) hinted at it in the morning.

“The finance department was keen on cutting VAT on petrol by ₹1 to bring the state taxes below the Central ones to score politically. But any such decision would have sent a wrong message, giving an opportunity to BJP to take credit after the prime minister’s remarks. Secondly, any such decision would have been inappropriate after Thackeray reacted sharply to Modi’s statements. The state government has to reduce VAT, but it may come ahead of the local body polls expected to be held later this year,” an official from the finance department, who did not wish to be named, said.

The state does not want to bring down VAT on petrol and diesel anytime soon as it will lead to huge revenue loss. Even a reduction by ₹1 will result in a monthly loss of ₹125 crore. “The state’s estimated revenue from VAT on petrol and diesel in the current financial year is ₹35,000 crore against ₹29,500 crore collected in 2021-22. It is true that the rise in petrol and diesel prices resulted in a financial windfall through VAT, but it is still a major source of revenue for us. In the wake of the rising prices of fuel, our revenue is expected to go up by 15% in the current financial year against the annual natural growth of 8%-10%,” the official said, adding the annual sale of diesel in Maharashtra is 1.15 lakh kilolitre while the sale of petrol is just 50,000 kilolitre.

A senior Nationalist Congress Party minister said the reduction of just ₹1 or ₹2 would neither help the state bring the prices to the level in the neighbouring BJP-ruled states, nor would it help politically. “The Centre had reduced its levy on petrol and diesel by ₹5 and ₹10 respectively, which was followed by further reduction by BJP-ruled states in their taxes. Maharashtra will have to cut its taxes drastically to match the prices with other states and it is not possible at this stage,” he said.

Maharashtra BJP chief spokesperson Keshav Upadhye said the Sena-led government started crying foul over payment of GST dues.

“Just as Maharashtra ranks first in the country in collecting the highest GST, it also tops in looting its citizens by levying the highest tax on petrol and diesel. In reality, the chief minister is misleading people. The figure of ₹26,000 crore is not right; the state has already received ₹13,000 crore, and the remaining amount will be given by July,” Upadhye said.

VAT and cess levied on petrol and diesel in Maharashtra is one of the highest in the country. VAT on petrol in Mumbai, Thane, Navi Mumbai, Aurangabad and Amravati is 26%, while it is 25% in the rest of the state with an additional cess of ₹10.12 per litre across Maharashtra. VAT on diesel is 24% in Mumbai, Thane, Navi Mumbai, Amravati and Aurangabad,