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The Central Government has reportedly advised BJP-ruled states to consider reducing Value Added Tax (VAT) on diesel in an effort to provide relief amid fuel price concerns. According to the report, discussions have been held with several state governments regarding possible reductions in diesel taxation, with the objective of easing transportation and logistics costs. The move comes at a time when fluctuations in global crude oil prices and fuel-related inflation continue to affect consumers and commercial sectors across the country.
As per the report, the Centre believes a reduction in VAT on diesel by states could help lower operating costs in sectors heavily dependent on fuel consumption, including transportation, agriculture, and goods movement. Diesel prices vary across states due to differences in state-imposed VAT rates. The discussions are reportedly focused primarily on BJP-governed states, where coordinated tax adjustments are being explored. No official announcement regarding the extent or timeline of any proposed VAT reduction has yet been made by the concerned state governments.