Nagaland NewsState govt cuts VAT on fuel by Rs. 7 per litre

State govt cuts VAT on fuel by Rs. 7 per litre

A day after the Centre cut excise duty on petrol and diesel by Rs.5 and Rs.10 respectively, the state government Thursday reduced value added tax (VAT) on diesel, petrol and other motor spirit by Rs.7 per litre with immediate effect.

Taking to twitter, state chief minister Neiphiu Rio tweeted: “Happy to announce that the Government of Nagaland has reduced VAT on diesel and petrol and other motor spirit by Rs 7 per litre, with immediate effect.”

In a notification, additional chief secretary & finance commissioner Sentiyanger Imchen stated: “In exercise of powers conferred by sub section 3 of Section 3A of the Nagaland (Sale of Petroleum and Petroleum Products including Motor Spirit and Lubricants) Taxation Act, 1967 (as amended), the Governor of Nagaland is hereby pleased to reduce the overall incidence of Value Added Tax (VAT) on ‘Diesel’ and ‘Petrol and other Motor Spirit’ sold within the State of Nagaland by Rs. 7 only per litre with reference to the prices prevailing on the 3rd of November 2021.”

Welcoming the decision, state deputy chief minster Y Patton said that reduction of VAT on petrol, diesel, and other motor spirits was a “great move that deserves appreciation.”

Following the cut in central excise and VAT, petrol and diesel prices in Dimapur stood at Rs.96.92 per litre and Rs.83.68 per litre respectively. In the state capital Kohima, petrol and diesel was retailing at Rs.98.05 per litre and Rs.84.59 per litre respectively. (See table)

IANS: Other North Eastern states– Assam, Tripura, Manipur, Arunachal Pradesh, Sikkim and Mizoram also announced additional cuts (VAT) in petrol and diesel prices by Rs. 7 a litre.

However, the petrol pumps in different North Eastern states are taking the new prices of the transport fuel as per the Centre’s excise duty slash, but the state governments’ additional reductions are not yet effected due to lack of appropriate official communications.

An official of Indian Oil Corporation said, with the Centre and state governments’ reduction of taxes the rate of petrol in the North Eastern states would be around Rs 100 to Rs 104 and diesel Rs 86 to Rs 90.

Will prices of essential items come down?
While people have welcomed the Centre’s decision to reduce the excise duty on fuel, the moot question is whether the authorities in the State will also ensure that prices of all commodities, including public transport, are rationally cut in view of the slashing of petrol and diesel prices?
Ever since the pandemic outbreak, the woes of the common man had only multiplied as fuel prices reached new heights. For instance, cement which was earlier sold at Rs. 470 per bag had shot up to Rs. 490 in Dimapur due to the hike in diesel prices. Similarly, prices of other essential items had also shot up without any regulation.
According to Indian Foundation of Transport Research and Training (IFTRT), freight rates on key trunk routes are expected to come down by 10-12 per cent over the next few days following the cut in the diesel prices.
The move will have a cascading impact on the prices of fruits, vegetables and other consumables, the prices of which are expected to come down, offering a relief from the persistent inflation. 
According to a corporate legal expert, as per the information published by the Central government, the cost inflation index (CII) for 2021-22 is 317. During 2000-2001, it was 100. 

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