Mumbai witnesses petrol and diesel price cuts due to reduced VAT
The Maharashtra government has announced a reduction in the Value Added Tax (VAT) on fuel, effective from 1st July, 2024, resulting in a slight decrease in petrol and diesel prices in Mumbai and surrounding areas. Deputy Chief Minister and Finance Minister Ajit Pawar revealed this decision during the presentation of the state Budget 2024.
As part of the new measure, petrol prices will drop by 65 paise per litre, while diesel prices will see a reduction of Rs. 2.60 per litre. This VAT reduction applies specifically to the municipal areas of Brihanmumbai, Thane and Navi Mumbai. The revised VAT on petrol will be 25 percent plus an additional Rs. 5.12, down from the previous 26 percent plus Rs. 5.12.
Minister Pawar stated that the decision to reduce VAT is expected to cost the state exchequer Rs. 200 crores. He emphasised that the government aims to provide some relief to residents amid fluctuating fuel prices.
This announcement comes shortly after the states of Karnataka and Goa increased their fuel prices earlier this month. The Goa government raised VAT to 21.5 percent on petrol and 17.5 percent on diesel, resulting in a price hike of Rs. 1 per litre for petrol and 36 paise for diesel. Similarly, Karnataka saw an increase of Rs. 3 per litre for petrol and Rs. 3.5 per litre for diesel, following a rise in sales tax to 29.84 percent for petrol and 18.44 percent for diesel.
The Maharashtra government’s move to reduce fuel prices stands in contrast to these recent hikes in neighbouring states, aiming to alleviate the financial burden on consumers in the Mumbai metropolitan region.
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