This caused confusion among government officials for hours, even as netizens had a field day poking fun at an administration that didn't seem to know what was happening under its own roof."In adherence to the Centre's advice, our government has chose to cut 2% Value-Added Tax and cess on petrol and diesel".
In a major relief for motorists and consumers, the state government on Tuesday made a decision to reduce the prices of petrol and diesel by Rs 2 and 1 per litre.
Maharashtra Finance Minister Sudhir Mungantiwar had termed it as a "Diwali gift" to people of the state.
While all the other metro cities saw rise in their petrol and diesel prices on October 11, 2017, it was only Mumbai who saw massive decline in its prices compared to previous day. "This is our Diwali gift to the masses", Mungantiwar said.
Last week, the Centre government had cut excise duty on petrol and diesel by Rs. 2 per litre. This will put a burden of about Rs 2,000 crore on the state exchequer. It further urged the Tamil Nadu government to reduce taxes on these products to benefit the common man. Maharashtra too reduced the rates by ₹2 and ₹1 for petrol and diesel respectively and said it would lose about ₹2,000 crore in revenue a year. Gujarat and Maharashtra have announced a reduction of 4 percent and Himachal Pradesh has announced a 1 percent cut. While BJP-ruled Gujarat and Maharashtra took the lead in lowering the tax, Congress-ruled Himachal Pradesh followed them. On diesel the state levies 21 per cent Value-Added Tax in Mumbai, Navi Mumbai and Thane and 22 per cent in the rest of the state. Given the huge difference between the maximum GST rates and current taxation rate on petrol and diesel, the government would require a cess of almost 50-75 percent to make up for lost revenue.
The government had last month brought down excise duty on petrol and diesel by Rs 2 per litre. "Dealers" strike on Oct 13 Meanwhile, although several petrol dealers in the country are threatening to go on strike on October 13 and start an indefinite strike from October 27, the oil companies still have not approached the state government to invoke provisions of Maharashtra Maintenance of Essential Services Act which provides for action against petrol pump owners.The petrol pump dealers have been demanding higher commissions.