The Bihar Government has reduced value-added tax (VAT) on petrol and it was not possible to do so further, the Deputy Chief Minister, Mr Sushil Kumar Modi, said on Tuesday.

“The Bihar Government has already reduced VAT rates from 27 per cent to 24.5 per cent which is lower compared with neighbouring States such as West Bengal and Uttar Pradesh,” Mr Modi told reporters here.

“It is impossible to further reduce it once again,” Mr Modi, who holds additional charge of Finance and Commercial Taxes, said referring to the Centre's letter to the States for VAT reduction.

He said there was a sharp decline in sale of petrol in Bihar, and the State Government had to bear heavy revenue loss because of it.

Stating that the Centre should have consulted the States before the hike, he said it was unfortunate that it did not do so.

Noting that oil companies like Indian Oil Corporation and BPCL were not showing a profit, he said the price of petrol was increasing.

He also alleged that the Centre's policy was responsible for the price rise and devaluation of the rupee.

Mr Modi claimed that the Centre was now planning to increase the prices of diesel, cooking gas and kerosene, and said the National Democratic Alliance, Biju Janata Dal, Samajwadi Party and the Left, had decided to agitate against the price rise on May 31.

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