Lending support to the Union government’s pitch for States to reduce sales tax (VAT) on petrol and diesel, Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday said a cut in VAT on fuel will help soften inflationary pressures as well as expectations.
The central government had on May 21 cut excise duty on petrol by a record ₹8 per litre and that on diesel by ₹6 to give relief to consumers battered by high fuel prices that have also pushed inflation to an all-time high. At that time, it asked States to lower VAT to further provide relief. Almost no State reduced VAT.
