The Maharashtra cabinet on Friday decided to reduce sales tax on diesel by five per cent in the state.
However, there would be no change in the tax rate or surcharge on petrol. The new diesel prices post the sales tax cut will be effective from December 1, official sources said.
Earlier in the day, while the cabinet meeting was on, an official had said that there was nine per cent cut in sales tax on diesel. But an official release issued after the cabinet meeting, said there would be five per cent reduction in sales tax on diesel.
Accordingly, 28 per cent tax would be levied on diesel in Mumbai, Navi Mumbai and Thane municipal corporation limits. Earlier it was 33 per cent. Similarly, 25 per cent tax will be levied on diesel in rest of the state. Earlier, it was 30 per cent.
Diesel rates would now be Rs 36.67 per litre in Mumbai, Navi Mumbai and Thane, compared to Rs 39.10 earlier. In the rest of the state, the price would be Rs 35.88 compared to Rs 38.32 earlier.
Since July 2002, 34 per cent tax and Re one surcharge per litre was levied on diesel in Mumbai, Navi Mumbai and Thane. In rest of the state, the tax was 31 per cent and Re one surcharge per litre.
When the Centre increased diesel prices by Rs 4 per litre in June this year, Maharashtra government had reduced tax on diesel by one per cent.
Petrol pump dealers in Maharashtra recently organised a 'no-purchase' agitation, demanding reduction in sales tax on auto fuels on par with other neighbouring states. Sales tax in Maharashtra is higher than neighbouring states, which lead to loss of business for fuel retailers.
Maharashtra imposes 33 per cent sales tax on petrol and 28 per cent on diesel while neighbouring states such as Gujarat levies 23.5 per cent on diesel and 26 per cent on petrol and Goa levies 21 per cent on diesel and 22 per cent on petrol.
