Rajasthan chief minister announces a 4% reduction in VAT on petrol and diesel

Ahead of the assembly polls in Rajasthan, state chief ministerVasundhara Raje on Sunday announced a four per cent reduction in value-added tax (VAT) on petrol and diesel.

The reduction in VATwill reduce the fuel prices by Rs 2.5 per litre in the state.

VAT on petrol will be reduced from 30 to 26 per cent and on diesel from 22 to 18 per cent.

The reduction was announced at a public meeting organised in Rawatsar in Hanumangarh district as part of her 'Rajasthan Gaurav Yatra'.

The decision will cost the exchequer Rs 2,000 crore and will provide the people with a relief of Rs 2.5 per litre on petrol and diesel.

"We have decided to reduce VAT on diesel and petrol by 4 per cent, which will provide much-needed relief to the people of the state, be it farmers or women or others," Raje said.

Petrol and diesel prices set new records Sunday as they continued their upward march on fall in rupee and surge in global crude oil rates.

The price of petrol on Sunday rose to Rs 80.50 a litre in Delhi, while diesel at Rs 72.61a litre.

In Mumbai, a litre of petrol was selling at Rs.87.89 while diesel at Rs 77.09 a litre.

The opposition Congress has called for a nationwide shutdown on Monday over rising fuel prices and depreciation of the rupee.

Earlier in the day,the All India Congress Committee (AICC) in-charge for Himachal Pradesh Rajni Patil said the chief ministers of Congress-ruled Punjab and Karnataka have already been directed to reduce value added tax (VAT) on petroleum products

Targeting the Congress, the Rajasthan chief minister said that the party had failed to play the role of an effective opposition and came out of its shell just before the election.

Assembly election in Rajasthan is scheduled for later this year.

(With inputs from agencies)