NEW DELHI: Finance Minister Arun Jaitley provided no indication today of any cut in excise duty on petrol and diesel to cushion the spike in rates, saying that the Government needs revenue to support public spending without which growth will suffer.
States levy a high amount of sales tax or VAT on fuel, he said without referring to the Rs 11.77 per litre hike in excise duty on petrol and Rs 13.47 a litre on diesel between November 2014 and January 2016 which took away gains arising from plummeting international oil rates.
BJP-ruled Maharashtra levies 46.52 per cent VAT (47.64 per cent in Mumbai) on petrol, the highest in the country. Andhra Pradesh has 38.82 per cent VAT on petrol while BJP- governed Madhya Pradesh levies 38.79 per cent VAT on the fuel.
BJP-led NDA governs 18 out of the 29 states.
Jaitley said however that the fuel prices will settle down soon.
“You should remember that the Government needs revenue to run. How will you build highways?,” he said. “The Government has increased public spending on infrastructure… Whatever (GDP) growth is there, it is fueled by public spending and FDI. If public spending is slashed, it will mean cutting down expenditure on social sector scheme.”
There is hardly any private investment, he said.
He was responding to questions from reporters at the weekly Cabinet meeting on whether the Government would consider cutting excise duty. (AGENCIES)
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