In the spirit of cooperative federalism, Prime Minister Narendra Modi today recommended that states decrease the Value Added Tax (VAT) on petrol. PM Modi noted that states that have decreased VAT have lower fuel prices when listing fuel prices in cities around the country. He emphasised the Constitution's spirit of cooperative federalism, saying the country successfully battled Covid through that spirit and must now do the same for economic challenges, considering the influence of global issues such as the existing "war-like scenario."
"Allow me to give you an example. Last November, the Centre lowered the excise rate on gasoline and fuel to ease the burden on citizens. We also asked states to lower their taxes and pass the savings on to the people. Some states decreased taxes, but others did not provide any benefit to the people as a result. As a result, gasoline and diesel prices in these states have remained high. This is, in some ways, not only an injustice to the people of these states, but it also has ramifications for neighbouring states "Prime Minister Modi stated.
"I'm not criticising anyone; I'm simply talking," the PM stated, as he listed the states that did not lower fuel VAT during the sharp increases. "Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, and Jharkhand, for whatever reason, refused to agree to lower gasoline VAT. The citizen continued to bear the brunt of excessive pricing "he stated
The PM stated that it is inevitable for states to lose money when they lower their taxes, yet numerous states took that "good move" regardless.
"Karnataka would have received an additional 5,000 crore in revenue in the last six months if it hadn't slashed taxes. Gujarat would have also collected an additional 3,500-4,000 cores "He went on to say that states that did not lower VAT gained thousands of crores in additional money.
He made a direct request to the Chief Ministers to lower the state gasoline tax and pass the savings on to the people. He also mentioned that the states receive 42% of the Centre's revenue. "In these time of global challenges, I implore all states to adopt the spirit of cooperative federalism and work together as a team," he said.