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Modi asks Opposition states to lower VAT on fuel, ‘not fair to your people’

The PM noted some states had not cut taxes on petrol, diesel even after the Centre cut excise duties.

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New Delhi: Prime Minister Narendra Modi requested states on Wednesday to reduce the value added tax (VAT) on fuel in the “spirit of cooperative federalism”.

He flagged higher fuel rates in Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala and Jharkhand. He said states which had lower VAT had lower fuel prices.

The Prime Minister noted that some states had not cut taxes on petrol and diesel even after the Centre cut excise duties. “This is unfair to the people in your states,” he said.

At a virtual meeting with chief ministers on Wednesday, the Prime Minister underscored how the country had fought against Covid with the spirit of cooperative federalism “as enshrined in the Constitution”. He said the same spirit should permeate into cooperation over economic issues, particularly during the ongoing “war-like situation” in the world.

He reiterated the Centre reduced excise duty on petrol and diesel last November to allay “the burden on citizens”. Modi said: “We also requested the states to reduce taxes and transfer the benefit to the people. Some states did, some did not. Prices of petrol and diesel in these states continue to remain high. This is not only an injustice to your people but it has also impacted neighbouring states.”

Modi added he was not criticising anyone, “just discussing”.

The Prime Minister said those states that cut taxes suffered losses but they still took the “positive step”. Had Karnataka not cut taxes, it would have made an additional Rs 5,000 crore in revenue in the last six months. Gujarat too would have made Rs 3,500 to Rs 4,000 crore more.”

Modi pointed out to chief ministers that 42 per cent of the Centre’s revenue go to the states and that in a time of “global crisis, we should work together as a team”.


Also read: ‘Covid is not fully gone, remain alert,’ Modi tells state heads after rise in cases


 

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