PM Modi urges states to reduce VAT to back cooperative federalism
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Prime Minister Narendra Modi has urged all states to lower Value Added Tax (VAT) on fuel "in the spirit of cooperative federalism". He was speaking to chief ministers at a virtual meeting.
He noted the Centre reduced the excise duty on petrol and diesel last November to reduce the burden on the citizens. "We also requested the states to reduce their taxes and transfer the benefit to the people ".
The PM said that some states were on board with this suggestion but others "did not give any benefit from this to the people." He added the states that lower their taxes will suffer losses in revenue but several states took that "positive step" anyway.
He recounted how the nation worked in the spirit of cooperative federalism during the pandemic and prompted the states to use the same attitude in dealing with economic issues.
The price of fuel remained high in the states that did not lower VAT. "In a way, this is not only an injustice to the people of these states but it also has an impact on neighbouring states," added the PM.
He went on to list the states that didn't lower VAT and stated that it is not a criticism but "just a discussion".
