New Delhi: Bowing to the demand of state petrol pump operators, Maharashtra Chief Minister Vilasrao Deshmukh on Tuesday agreed to cut state sales tax on petrol and diesel to make the auto fuels competitive with neighbouring states.
"I agree that sales tax in Maharashtra is the highest in the country and there is a need to for a reduction. But I cannot just now say how much and by when it will be done. A committee under state finance minister is seized of the issue and the decision will be taken by the state Cabinet after it gets their recommendations," he said after meeting Petroleum Minister Murli Deora.
Deora renewed his plea to the Maharashtra government to cut sales tax on petrol and diesel to give relief to fuel pump dealers, who were losing high volume business to neighbouring states where tax rates were much lower.
“State Finance Minister is talking to petrol pumps operators and a decision would be taken shortly,” Deshmukh said.
Deora said the sales tax rates in Maharashtra are the highest in the country, which put the petrol pump dealers at a disadvantage.
Sales tax in Maharashtra is higher than neighboring states, leading to loss of business for fuel retailers.
Maharashtra imposes 33 per cent sales tax on diesel and 28 per cent on petrol while neighbouring states such as Gujarat levy 23.5 per cent on diesel and 26 per cent on petrol and Goa 21 per cent on diesel and 22 per cent on petrol.
"As a result of high tax rates, truckers prefer refueling their vehicles in Madhya Pradesh or Gujarat. This has made fuel retailing a loss-making business in Maharashtra," Deora said.
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