Bihar government slashes VAT on diesel

A decision to this effect was taken by the state cabinet presided over by Chief Minister Nitish Kumar. Later, briefing reporters, Deputy Chief Minister S K Modi said the cabinet decided to slash the vat on diesel by 0.36 per cent from 18.36 per cent to 18 per cent, reducing the price by 14 paise per litre.

"The state exchequer will suffer loss to the tune of Rs 37 crore per annum by slashing the VAT," he said. Stating that the rate of tax on prices of petroleum was "at its lowest level", Modi said the state government had already reduced the VAT on kerosene from 12.5 per cent to five per cent on July 12, 2010.

Asking Centre to reconsider its decision on the hike in prices of diesel, cooking gas and kerosene, Modi described the decision as "unilateral". He further criticised the Centre for hiking the prices of diesel, cooking gas and kerosene without taking the states into confidence and alleged that it wanted "to trap state governments by asking them to reduce VAT."

"The hike in prices of diesel, cooking gas and kerosene is condemnable. Centre, under a conspiracy, wants to trap the state governments by asking them to reduce the VAT," Modi said.

"We have now very little scope to bring down the prices of petroleum products in Bihar," he said adding that the Centre should not increase the prices of diesel because it would directly affect agriculture and transport.

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