Maharashtra govt slashes fuel prices

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New Delhi: Maharashtra government on Wednesday reduced the petrol price by 80 paise per litre and diesel by 30 paise per litre.

Reduction was done on the lines of the policy adopted by the other Congress-ruled states.

A proposal to reduce sales tax was passed at the Cabinet meeting.

The NCP supported the reduction of sales tax on petrol and diesel in the state, putting to rest all reports of differences with the Congress on the issue.

Announcing the decision, Chief Minister Vilasrao Deshmukh said that the Cabinet approved the improved taxes of petrol and diesel under the Value Added Tax.

The state government will suffer a loss of Rs 350 crore with the fuel price cut.

Deshmukh said that if the taxes were reduced in the ratio of increase in the prices of petrol and diesel, then it would not affect the revenue while on the other hand, people would be benefited.

Earlier there were reports of the NCP opposing the proposed reduction of sales tax on fuel saying it would lead to a considerable depletion in the state's revenue and accusing the Congress of "playing to the gallery."

Delhi government on Tuesday reduced petrol and diesel prices by 67 paise and 22 paise respectively.

The reduction was effected by slashing Value Added Tax (VAT) on the increased amount, Delhi Finance Minister A K Walia said after a Cabinet meeting chaired by Chief Minister Sheila Dikshit.

However, Uttar Pradesh's ruling Samajwadi Party (SP) on Tuesday announced that it would not reduce Sales Tax on the hiked prices of petrol and diesel as has been done in Congress-ruled states.