Mamata's answer to PM Modi on reducing VAT on fuel: Already low on petrol, no further cut possible

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West Bengal, which, along with Manipur, ranks tenth among Indian states both in terms of total tax component and state value added tax per litre of petrol, ruled out any possibility of further reducing VAT as urged by Prime Minister Narendra Modi on Wednesday.

With the latest petrol price hovering around Rs 115 per litre in West Bengal, the total tax component per litre on petrol, that includes central excise and VAT, is Rs 54.10. Out of that, Rs 32.90 is on account of central tax and remaining Rs 21.20 is VAT.

Talking to IANS, state Finance Minister Chandrima Bhattacharya said that the state government, for the last two years, is already giving a subsidy of Re 1 per litre for both petrol and diesel on which the state government has spent Rs 1,500 crore.

"Our VAT is already low compared to states like Maharashtra, Andhra Pradesh, Telangana, and Kerala. Despite our financial constraints we have not increased the rate so far. Rather, we are continuing with our subsidy of Re 1 per litre petrol and diesel. Still, we are ready to cut our rates further as said by our Chief Minister, Mamata Banerjee. But to enable us to do that the Union government needs to clear our dues which is hovering at Rs 95,000 crore," she said.

Bhattacharya also told IANS that the skyrocketing price of petrol and diesel is not because of the state taxes. "It is because of the cess and surcharge levied by the Union government, out of which the state gets no share. Since no Chief Minister could speak in the virtual meeting chaired by the Prime Minister, these points could not be raised," she said.

On Wednesday, Chief Minister Banerjee alleged that the Prime Minister, while blaming the non-BJP state governments of not reducing VAT on petrol and diesel, ignored the fact the Union government is giving preferential treatments to BJP-ruled states in payment of central dues.

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