Petrol, diesel & liquor cost may increase in Maharashtra

The hikes came into effect from midnight Wednesday and will be reviewed before the budget for the next financial year. However, the tax continued to be in force for 1,162 traders with a turnover above the Rs 50 crore limit.

A range of items including petrol, diesel, alcohol, cigarettes, cold drinks, diamond and gold jewellery will cost more from tonight in Maharashtra, as the Devendra Fadnavis government, in a desperate bid to bolster its finances, has made a decision to levy a surcharge to tackle drought in the state.

“However, despite scrapping LBT, the state should not be damaged financially and hence, we have made a decision to impose (an additional surcharge) of Rs 2 per litre on petrol and diesel”, he added.

The minister said that a surcharge of Rs 2 per litre on fuel would help the state compensate for a monthly loss of R300 crore that it would have suffered because of the scrapping of local body tax (LBT). This is in addition to the Rs 4,210 crore to be spent on scrapping LBT and devolving stamp duty collections to local bodies to make up for the loss and Rs 799 crore to shut down 12 toll projects and waive off toll on cars at 53 toll nakas. But petrol pump owners were opposing the move and were asking for the benefits of scrapping LBT.

State Finance Minister, Sudhir Mungantiwar told reporters that due to decline in global prices of oil, Maharashtra has lost a revenue of Rs 300 crore per month but it requires revenue for its various commitments therefore the taxes have been increased.

However, the state, sensing that an increase of Rs 2 would hit consumers, has decided that it will stop levying LBT on fuel in the state.

Petrol, diesel, liquor, cigarettes, soft drinks diamonds, gold, silver and their ornaments will cost more from October 1. Gold and diamond jewellery will also see an increase in Value-Added Tax of 20%. “Those who have money for vices should be able to spend a few rupees more for the farmers”, he noted. “We are confident that they will welcome the decision and help their brethren in distressed areas”, said Mungantiwar after the cabinet meeting. Mungantiwar said that removing LBT from diesel and petrol would mean a marginal increase or decrease of 50 paise.

When the petrol prices fell by Rs 2.11 following the crude crisis; people gained over Rs 1,000 crore due to this reduction.

Sources said the state government was mulling the drought tax since this year’s annual budget was presented.