Centre should reduce VAT on imported oil, pay pending GST amount to states first: Maharashtra

New Delhi: Opposition-ruled states continue to blame the Centre over high fuel prices and pending GST compensation to several states and have accused Prime Minister Narendra Modi of playing politics over the issues.

Commenting on Prime Minister’s appeal to opposition-ruled states to reduce VAT on fuel prices, Maharashtra Deputy CM Ajit Pawar said, “We can discuss petrol-diesel prices in cabinet today. CM will tell us what happened in the meeting with the PM yesterday. Everyone in the country has to accept that import oil is taxed first by Centre & then states, so the Center should also reduce tax.”

We can discuss petrol-diesel prices in cabinet today. CM will tell us what happened in meeting with the PM yesterday. Everyone in the country has to accept that import oil is taxed first by Centre & then states, so the Center should also reduce tax: Maharashtra Dy CM Ajit Pawar pic.twitter.com/2Yf42zASF1 — ANI (@ANI) April 28, 2022

He also blamed the Centre for giving the full GST compensation pending to the states. 

“A huge GST amount is yet to come from the Centre. PM appealed to reduce tax on petrol diesel yesterday, we did not increase any tax in the budget this year. We reduced tax on CNG due to which the state suffered a loss of Rs 1000 crores,” Ajit Pawar according to ANI.

We can discuss petrol-diesel prices in cabinet today. CM will tell us what happened in meeting with the PM yesterday. Everyone in the country has to accept that import oil is taxed first by Centre & then states, so the Center should also reduce tax: Maharashtra Dy CM Ajit Pawar pic.twitter.com/2Yf42zASF1 — ANI (@ANI) April 28, 2022

It may be noted that during his interaction with the chief ministers on the Covid situation, the PM has expressed grave concerns over higher VST on fuel prices in the opposition-ruled states. He also appeared to be "passing the buck" on to states to reduce prices of petrol and diesel.

As the prime minister's remark triggered a war of words, the BJP said the Opposition's stance reeks of hypocrisy and alleged that for every litre of petrol, opposition-ruled states were earning twice as much as the BJP-ruled states.

Flagging higher fuel prices in many opposition-ruled states, PM Modi had urged them to reduce VAT in "national interest" to benefit the common man and work in the spirit of cooperative federalism in this time of global crisis.

PM Modi raised the issue of many states not adhering to the Centre's call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last, and called it "injustice" to people living there and also harmful for neighbouring states.

Many states such as Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand and Tamil Nadu for some reason or the other did not listen to the central government and the citizens of those states continued to be burdened, the PM said.

Reacting to PM Modi's remarks at the meet, West Bengal Chief Minister Mamata Banerjee said the interaction with him was completely one-sided and misleading.

Maharashtra Chief Minister Uddhav Thackeray said the Centre owed Rs 26,500 crore to the state, after Prime Minister Modi said some states did not reduce VAT on petrol and diesel despite the excise duty cut by the Union government in November last year.

Thackeray also accused the Centre of a step-motherly treatment to Maharashtra and that the state government was not responsible for the rise in prices of petrol and diesel.

Kerala Finance Minister K N Balagopal said the increase in petrol and diesel rates was due to the cess and surcharge levied by the Centre. He said Kerala has not increased taxes on petroleum products in the last six years.

Congress chief spokesperson Randeep Surjewala attacked Modi, demanding that he give an account of the Rs 27 lakh crore "collected" by the BJP government from tax on petrol and diesel.