Maharashtra cuts VAT on diesel, kerosene by 2 percent

Mumbai: Providing marginal relief to the common man reeling under inflation, Maharashtra Wednesday announced a two percent reduction in value added tax on diesel and kerosene.

Announcing this here, Chief Minister Prithviraj Chavan said that the VAT which is currently levied at 26 percent in Mumbai and Thane will now come down to 24 percent, while in the rest of Maharashtra, VAT of 23 percent will be now 21 percent.

"Accordingly, the prices of diesel will be cheaper by 72 paise, and kerosene by 28 paise, providing relief to the people," Chavan said, after presiding over a cabinet meeting which had a special discussion on the issue.

However, there will be no change in the prices of LPG as Maharashtra does not levy VAT on cooking gas.

The reduction in prices of diesel and kerosene came with the spectre of another round of price hikes demanded by the transport and other sectors, which could have a spiraling effect on inflation.

For instance, the Maharashtra State Road Transport Corporation is contemplating a 7 to 9 percent hike in bus fares.

Similarly, milk and vegetable vendors have also threatened to hike prices to offset the additional cost of diesel that they would bear.

The favourite Mumbai snack, vada-paav, is also likely to become more expensive as the prices of kerosene have gone up - from the existing Rs.4-5 apiece to Rs.6-7.

 

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