Gujarat becomes first state to reduce fuel VAT

Value Added Tax on fuel price has been reduced in Gujarat by 4%. Gujarat has become the first state in the country to go for the reduction.

After the reduction in VAT, petrol will now be cheaper by ₹2.93 per litre and diesel by ₹2.72 per litre in the state.

The decision was taken after the Centre government reduced the excise duty on fuel by ₹2/litre.

The centre government has asked the states to reduce the VAT on fuel by 5%.

State governments get the most benefit from the fuel prices as they get all of the VAT collection along with 42 per cent of the central excise collections.

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