PM Modi Urges States To Slash VAT On Fuel, Opposition Hits Back

| Updated : April 27, 2022, 8:13 pm
Updated : April 27, 2022, 8:13 pm

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During a meeting with chief ministers on COVID situation, PM Narendra Modi asked states to slash VAT on petrol and diesel.


NEW DELHI: Opposition parties on Wednesday slammed Prime Minister Narendra Modi for his call to reduce Value Added Tax (VAT) on petrol and diesel by states and sought an account of Rs 26 lakh crore collected by the Centre as tax when crude oil price was at lowest in the last eight years.

During a meeting earlier in the day, PM Modi, while interacting with chief ministers during a meeting to discuss the Covid situation, said that some states did not reduce VAT on petrol and diesel despite the excise duty cut by the Centre last November.

He said the states had done “injustice” to the people by not transferring the benefits of the move to them and requested the chief ministers to bring down VAT on fuel “in the spirit of cooperative federalism”.

Reacting to PM Modi’s statement, Congress spokesperson Randeep Singh Surjewala, in a series of tweets, said, “Modi ji, no criticism, no distractions, no jumlas! excise duty during – Congress government – petrol – Rs 9.48/litre, diesel – Rs 3.56/litre. Modi government petrol – Rs 27.90/litre, diesel – Rs 21.80/litre.”

He said, “Please roll back the excise hike of Rs 18.42 in petrol and Rs 18.24 per litre in diesel.”

“Please give an account of Rs 27 lakh crore collected by the BJP government from tax on Petrol and Diesel,” he demanded.

“26th May, 2014, when PM Modi assumed charge, the crude was 108 US Dollar, but petrol and diesel was at Rs 71.41 and Rs 55.49 per litre, today, crude oil is USD 100.20 per barrel, but the petrol/diesel prices have been increased to Rs 105.41/litre and Rs 96.67/litre in Delhi.

“Modi ji, we will urge all states to decrease VAT on petrol/diesel to pre-May 2014 level. Please admit the BJP government earned Rs 27 lakh crore from petrol/diesel while all states collectively received about Rs 16.5 lakh crore. Central government revenue from petrol/diesel has doubled in 8 years,” Surjewala said in another tweet.

Meanwhile, reacting to the Prime Minister’s comment, Congress spokesperson Pawan Khera during a press conference at the party headquarters here said, “This cooperative federalism is not a one-way traffic but a two way traffic.

“You are seating in Centre and have earned Rs 26 lakh crore, so first give account of this amount and by showing a big heart distribute the same to the consumers. The common tax payer is facing the heat.”

Khera further stated that the GST share of the state government, which is their constitutional right, you (Central government) take a lot of time to return the same.

Even Shiv Sena Rajya Sabha MP and spokesperson Priyanka Chaturvedi took a swipe at PM Modi. “Making a COVID meeting about politics! The central government has earned Rs 26 lakh crore out of central excise on fuel, increased 18 times even when oil prices hit rock bottom. The GST share to states still owed, compensation component to states done away with and now pointing fingers,” he said.

“Important reminder that central government’s share in total taxes on fuel is 68% but the responsibility is that of the states! Figure that!” she further said.

During the meeting, the Prime Minister said: “Let me give you a small example. The Centre reduced the excise duty on petrol and diesel last November to reduce the burden on the citizens. We also requested the states to reduce their taxes and transfer the benefit to the people. Some states reduced taxes but some states did not give any benefit from this to the people.”

“Due to this, the prices of petrol and diesel in these states continue to remain high. In a way, this is not only an injustice to the people of these states but it also has an impact on neighbouring states,” PM Modi added.

“I am not criticising anyone, just discussing,” the PM said while listing out the states that did not reduce VAT on fuel during the steep hikes. “For some reason, states like Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, and Jharkhand did not agree to slash VAT on fuel. The burden of high prices continued to stay on the citizens,” she said.

Just a day ahead of Diwali, in November last year the central government had reduced excise duty on petrol and diesel by Rs 5 and Rs 10 respectively.

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