Uttarakhand Finance Minister Prakash Pant announced on Wednesday that the state government has decided to cut the cess and Value Added Tax on fuel by 2% each, ANI reported.

The move comes after three other states, Maharashtra, Gujarat and Himachal Pradesh, cut Value Added Tax on fuel on Tuesday. While in Gujarat it was lowered by 4%, Maharashtra cut the price on petrol and diesel by Rs 2 and Re 1 per litre. Congress-ruled Himachal Pradesh had announced a 1%-reduction on Value Added Tax.

The announcements come days after the Centre had asked all state governments to cut the Value Added Tax – an additional state levy – on fuel by 5%. “We urge states to take responsibility, just like the Centre did, in the direction of consumer interest,” Minister for Petroleum and Natural Gas Dharmendra Pradhan had said.

Advertisement

Since states were the ultimate beneficiaries of taxes on petrol and diesel, they should share the responsibility of providing relief to consumers, he had said on October 4.

A day earlier, the Centre had decided to reduce excise duty on petrol and diesel by Rs 2. The decision is expected to help cushion the impact of rising crude oil prices on retail petrol and diesel prices, a government release had said. The government, however, expects an extra revenue loss of Rs 13,000 crore in the remaining financial year because of the reduction.