Uttarakhand reduces VAT and cess on petrol, diesel by 2 per cent each

Mumbai: After Maharashtra and Gujarat, the Uttarakhand government on Wednesday decided to cut 2 per cent cess and 2 per cent VAT on petrol and diesel.

Uttarakhand Finance Minister Prakash Pant confirmed that the state government had decided to slash cess and VAT on petrol and diesel.

This decision to slash VAT and cess on petrol and diesel comes after the Centre last week slashed the excise duty on petrol and diesel in the wake of escalating prices. Finance Minister Arun Jaitley further said that it was up to states to reduce VAT, since they were direct beneficiaries of the same.

The BJP-led Gujarat government was the first to slash VAT on petrol and diesel. Chief Minister Vijay Rupani said, "After the central government's instructions, Gujarat has decided to reduce VAT on petrol and diesel by 4 per cent from today mid-night."

Calling it a "Diwali gift", the Maharashtra government followed suit by reducing VAT on petrol and diesel by Rs 2 and Re 1 a litre, respectively.

Petrol and diesel rates surged to a three-year high across the country. Petroleum Minister Dharmendra Pradhan has recently been rallying for the inclusion of petrol and diesel under the ambit of GST, claiming it is the only way to have a "rational price mechanism in petroleum products".