MP reduces Value-Added Tax on petrol, diesal by 3% and 5%

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Madhya Pradesh has become the third BJP-ruled state after Gujarat and Maharashtra to reduce Value Added Tax on Petrol and Diesel. Earlier, the central government had reduced the excise duty on petrol and diesel rates by Rs 2 per litre each.

State Congress was critical even as the Shivraj Singh Chouhan government cut VAT on diesel and petrol. Opposition leaders described the cut in taxes as "too little" and done under the extreme pressure of the Union government keeping upcoming bypoll and elections in mind. "Now it is up to state governments if they are concerned with the issue (to cut sales tax or VAT)", he had said.

An additional Rs. 1.50 have also been reduced on the same.

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Mungantiwar said the new rates on petrol and diesel will be effective from Wednesday. The decision would cause a revenue loss of about Rs 1,000 crore to the state exchequer in the remaining six months of the current fiscal, he said.

The uptick in petrol and diesel prices weighed heavy on consumer inflation in September, contributing to 5.56 per cent of the index. "Presently, the worldwide prices of crude oil is between $42 to $47 per barrel and fuel prices should be as low as Rs 45 to Rs 50".

According to the Newspaper, Madhya Pradesh becomes the first state among BIMARU states to reduce Value-Added Tax on petrol and diesel after an appeal from the central government to the states.In Bhopal, petrol will now cost Rs 73.13 per litre against the earlier price Rs 74.79 per litre.

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