The minister announced that the price reduction is applicable in the municipal areas of Brihanmumbai, Thane and Navi Mumbai. The value-added tax (VAT) on petrol has been reduced to 25 per cent plus Rs 5.12 additional tax from 26 per cent VAT plus Rs 5.12 additional tax, he added.
The minister further clarified that the decision to reduce VAT will cost the state exchequer Rs 200 crore. The reduced prices on petrol and diesel will be effective from July 1 onwards.
The announcement comes just days after the states of Karnataka and Goa increased fuel prices. The Goa government increased VAT to 21.5 per cent and petrol and 17.5 per cent on diesel. Prices have gone up by Rs. 1 per litre on petrol and 36 paise on diesel in the state. Meanwhile, prices in Karnataka increased by Rs. 3 per litre of petrol and Rs. 3.5 per litre of diesel. The Karnataka government increased the sales tax on petrol and diesel by 29.84 per cent and 18.44 per cent respectively.
