Ajit Pawar reacts over PM Modi's appeal to reduce VAT on fuel

After Prime Minister Narendra Modi advised the state governments to reduce taxes on the issue of rising fuel prices, its political repercussions can be now seen in Maharashtra. In view of the increasing COVID cases, PM Modi held a video conferencing with the Chief Ministers of all the states and discussed more on petrol-diesel issues rather than health issues.

The Prime Minister called upon opposition-ruled states to follow the Centre's decision by reducing taxes on petrol and diesel to provide relief to the people from the price hike. Deputy Chief Minister Ajit Pawar suggested that the central government should take a decision on fuel tax with the consent of all the states.

Speaking to reporters ahead of the state cabinet meeting, Ajit Pawar clarified his position on other issues including fuel tax. No tax increase was made in the state budget. In contrast, taxes on CNG and PNG (pipeline gas for domestic use) were reduced. In the state budget, the tax on CNG has been reduced from 13.50 per cent to 3 per cent. A burden of Rs 1000 crore has fallen on the state coffers. However, Ajit Pawar said that the government has tried to provide relief to the people. Some arrears of GST are yet to be received from the Central Government. Ajit Pawar said he is expecting that the remaining amount of GST would be received from the Centre in the next two to three months. 

Central taxes are levied on imported crude oil and fuel. Ajit Pawar also clarified that state taxes are applicable after that. Ajit Pawar also said that the central government should reduce its taxes. He also appealed to the central government to set a tax limit on fuel tax on the basis of GST. He also said that the revenue generation of state governments is limited.