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Oil ministry seeks 5% cut in VAT from states on petrol, diesel

LiveMint logoLiveMint 04-10-2017 Reuters

New Delhi: Oil minister Dharmendra Pradhan said on Wednesday that his ministry has asked for a 5% cut in additional state levy, a day after the federal government cut factory gate tax on petrol and diesel to protect retail consumers from high global crude oil prices.

The finance ministry had earlier ruled out lowering factory gate duties on petroleum products citing pressure on government finances.

“By taking cognizance of the whole scenario, the prime minister has given direction to the finance ministry and the oil ministry to look into this aspect and rightly, I don’t see this as an issue of loss or gain,” Pradhan told reporters. “There is about $10 difference between crude oil prices and petroleum prices.”

India on Tuesday cut factory gate tax on petrol and diesel by Rs2 per litre, a move analysts said could widen the country’s fiscal deficit.

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