Why Maharashtrians may not get relief even as petrol price nears Rs 85 mark

A public debt of Rs 4.50 lakh crore, annual outgoing of Rs 1.30 lakh crore towards wages and interest payment, burgeoning revenue, fiscal deficits and higher spending on infrastructure and welfare projects make it nearly impossible for the BJP led government in Maharashtra to gift any leeway in VAT/Sales Tax on petrol and diesel.

At 14 per cent, Maharashtra’s contribution is the highest, state-wise, towards collection of sales tax/VAT on petrol and diesel. This makes any relief for Mumbai, which at the current Rs 84.70 per litre (petrol) and Rs 72.48 per litre (diesel), sells the costliest auto fuel in the country.

The state government has strongly opposed inclusion of petrol and diesel in the GST regime. It fears major revenue loss if the current 26 per cent sales tax/VAT per litre on petrol in Mumbai, Thane and Vashi and 25 per cent per litre in rest of Maharashtra plus surcharge of Rs 9 per litre is reduced any further. In case of diesel, the government charges 24 per cent sales tax/VAT per litre in Mumbai, Thane and Vashi and 21 per cent per litre in rest of Maharashtra, plus Re 1 surcharge.

In response to the centre’s call in - especially after the rise in petrol and diesel prices following surge in crude oil prices -  the state government had reduced the surcharge to Rs 9 per litre from Rs 11 per litre on petrol and Re 1 from Rs 2 per litre in October. The government had estimated a revenue loss of Rs 2,600 crore following the cut.

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Maharashtra’s Finance Minister Sudhir Mungantiwar and his deputy Deepak Kesarkar were not reachable to comment on the matter. However, a BJP minister told DNA that, “There is very limited scope for the government to further cut the surcharge on petrol and diesel. Of the total collection of sales tax/VAT of Rs 1.14 lakh crore, Rs 22,652 crore was contributed by sales tax/VAT on petrol and fuel in 2017-18 which comes to 19.36 per cent. In 2016-17, the state had collected sales tax/VAT worth Rs 90,525 crore, of which Rs 18,977 crore was mobilised from sales tax/VAT on petrol and diesel that was 22.25%.”

By Sanjay Jog, DNA India