Panaji: The state government on Tuesday reduced the value added tax (VAT) on petrol by two per cent following the petrol price hike by oil companies last night.
The government in its election promise had said that it will try to maintain the petrol price below Rs 60 per litre.
Reduction of VAT will come into effect from today midnight
Last night, oil companies had increased the petrol price by around 90 paise. With the hike, the price, which stood at 58.85 per litre, went up to Rs 60.70 per litre.
Speaking to TOI, Commissioner of Commercial Taxes Dipak Bandekar said that to keep the government assurance to keep the petrol price below Rs 60, we have reduced VAT by two percent.
He also said “we came to know today (Tuesday) morning the increase in petrol price and we immediately took a decision to reduce VAT from 22 per cent to 20 per cent.”
Chief minister Laxmikant Parsekar, in his recent budget speech hiked the VAT on petrol despite the BJP promising to lower fuel prices in their 2012 manifesto.
Petrol prices were hovering around 51.10 in the state when Parsekar announced to increase the VAT to 22%.
Parsekar increased the VAT on motor spirit from 15 percent to 22 percent which was reduced to 0.5 percent by his predecessor, defence minister Manohar Parrikar in 2012.
While hiking the petrol price, Parsekar also promised to maintain the petrol price below Rs 60 per litre.