New Delhi | Jagran Business Desk: Rajasthan chief minister Ashok Gehlot on Tuesday announced that the state cabinet has decided to reduce the value-added tax (VAT) on petrol and diesel prices by ₹4 and ₹5, respectively. The new prices will be effective from the midnight of November 16, the chief minister added.

Taking to his official Twitter handle Gehlot wrote, “In the Cabinet meeting today, it was unanimously decided to reduce the rate of VAT on petrol/diesel. From 12 o'clock tonight, the rates will be reduced by ₹4 per liter for petrol and ₹5 per liter for diesel.”

The decision to cut the VAT on petrol and diesel prices has cost the state government a loss of ₹3,500 crore in the annual revenue, the chief minister said.

Rajasthan is now the second Congress-ruled state to cut VAT on petrol and diesel. Last week Punjab slashed petrol prices by ₹ 10 per litre and cut diesel rates by ₹ 5 per litre.

Earlier, the Centre had reduced excise duty on petrol and diesel to bring down the prices of the two petroleum products which had been seeing an upward trend. This was done on the eve of Diwali. The Finance Ministry had said that excise duty on petrol will come down by ₹5 and that on diesel by ₹10. It urged the states “to commensurately reduce” VAT on petrol and diesel to give relief to consumers.

Fuel prices have skyrocketed over the past several months, with persistent tax hikes by the centre leaving petrol and diesel at over ₹ 100 per litre in many cities and over ₹ 110 in some.

Ten BJP-ruled states - Assam, Tripura, Manipur, Karnataka, Goa, Uttar Pradesh, Goa and Manipur - followed the centre in cutting state-level duties. Out of these four will hold elections next year - UP, Uttarakhand, Goa and Manipur.

(With inputs from agencies)

Posted By: Sugandha Jha