All Eyes on Oppn-Ruled States as BJP Govts Cut VAT on Centre’s Cue

Many BJP and NDA-ruled states have taken a cue from the Centre to announce slashing of Value Added Tax (VAT) on fuel, but Opposition-ruled states have not relented so far, putting the onus rather on the Centre with the argument that the reduction in excise duty is not enough.

BJP-ruled Gujarat, Uttar Pradesh, Karnataka, Tripura, Goa, Uttarakhand, Manipur, Assam and Bihar announced cuts in VAT on Wednesday evening, close on the heels of the Centre reducing excise duty on fuel and imploring states to do the same. This came as a major relief to the common man who has been reeling amid the record high fuel prices. BJP leader Amit Malviya even questioned if people living in Opposition-ruled states did not deserve the respite.

But BJP-ruled Madhya Pradesh, which perhaps has the costliest fuel rates in the country, and Haryana are yet to announce VAT reduction and may do so on Thursday after nearly all other BJP-ruled states have done so.

A senior Congress leader argued that while Chief Ministers of Opposition-ruled states would take the call ultimately and some may announce VAT reduction too as it was a “public issue”, the fact remained that the excise duty cut by the Centre (Rs 5 on petrol and Rs 10 in diesel) was too less compared to the record hike seen over the last couple of years.

“The Centre needs to do far more rather than weigh upon states to reduce VAT drastically. Excise duty was hiked by a big margin even during the pandemic. Let them first bring excise duty back to the earlier levels,” the Congress leader said.

Big states like Delhi, Maharashtra, Chhattisgarh, Tamil Nadu, Punjab, West Bengal, Rajasthan and Telangana are yet to announce any relief through VAT reduction. The Opposition is raising the refrain that the Centre has reduced the excise duty after the loss in by-elections in Himachal Pradesh, Rajasthan and Karnataka.

“In 2021, petrol price was hiked by Rs 28 and diesel was hiked by Rs 26 a litre. After losing 14 Assembly and two Lok Sabha bypolls, reducing petrol-diesel price by Rs 5 and Rs 10 is tom-tommed as ‘Diwali gift’ of Modi ji,” Congress spokesperson Randeep Surjewala said on Wednesday.

A senior government source, however, told News18 that ultimately all states will reduce VAT under “public pressure” as a state like Delhi could not afford to have much higher fuel rates than neighboring Uttar Pradesh, and that holds true for other states. “Political barbs will be exchanged but everyone knows it is the Modi government which has stolen the march on reducing taxes, followed promptly by NDA-ruled states,” the source said.

He said the BJP had won handsomely in bypolls in Madhya Pradesh which had high fuel prices as well. But for now, politics has entered the arena of fuel prices as people wait for greater relief depending on which party-ruled state they live in.