Imported oil is taxed first by the Centre and then states, Maharashtra Deputy CM Ajit Pawar slams Centre on fuel price hike

Ajit Pawar. File Photo

PM Narendra Modi has appealed to states to reduce tax on petrol and diesel, but imported oil is taxed first by Centre and then the states, so the Centre should also reduce tax, said Maharashtra Dy CM Ajit Pawar on Thursday.

Pawar said the state government did not increase any tax in the State budget this year. Maharashtra reduced tax on CNG due to which the state suffered a loss of Rs 1000 crores, he added.

Pawar said that just like the Centre bought 'one nation, one tax' policy to promote the idea of Goods and Services Tax (GST), it should bring about the same change when it comes to levying taxes on petrol and diesel in the country.

Speaking at a press conference today, the Deputy Chief Minister said, "Firstly, it remains to be seen how much GST money will come from the Centre to the state. PM Modi appealed to States and UTs to reduce VAT on petrol and diesel. In response, I would say that the Maharashtra Government did not increase any tax in the budget this year."

"We can discuss petrol-diesel prices in cabinet today. Maharashtra Chief Minister Uddhav Thackeray will tell us what happened in the meeting with PM Modi yesterday. Everyone in the country has to accept that the imported oil is taxed first by the Centre and then states, so the Centre should also reduce tax," Pawar said.

The Minister said, "Like 'One Nation One Tax' policy, the Centre should consider making a policy on petrol and diesel. The Maharashtra government gives the maximum amount of taxes to the Central government. The Centre should take note of this fact."

This comes a day after Maharashtra Chief Minister Uddhav Thackeray slammed the Centre by saying that the state government cannot be held responsible for the hike in fuel prices.

Thackeray told reporters on Wednesday after attending a meeting with the Prime Minister virtually, "Today, in the price of one litre of diesel in Mumbai, Rs 24.38 is for the Centre and Rs 22.37 is for the state. In petrol price, 31.58 paise is central tax and 32.55 paise state tax. Therefore, it is not a fact that petrol and diesel have become more expensive due to the state."

The Maharashtra Chief Minister said, "Maharashtra collects the highest GST of 15 per cent in the country. Combining both direct taxes and GST, Maharashtra is the number one state in the country."

On Wednesday, Prime Minister Narendra Modi held a Covid-19 review meeting with Chief Ministers of all States and Union Territories. West Bengal Chief Minister Mamata Banerjee, Delhi Chief Minister Arvind Kejriwal, Punjab Chief Minister Bhagwant Mann, Maharashtra Chief Minister Uddhav Thackeray, Chhattisgarh Chief Minister Bhupesh Baghel were amongst those present in the meeting.

In the meeting, Prime Minister Modi appealed to the States ruled by non-BJP parties to reduce tax on fuel. He said prices of fuel were higher in many opposition-ruled states and urged them to reduce Value Added Tax in "national interest" and as a part of "cooperative federalism" to benefit the common man.