Gehlot wrote in his letter that with the reduction of excise duty by the Centre, the VAT of the states automatically reduces proportionally, according to a release.
He said due to reduction of excise duty on petrol by Rs 5 per litre and Rs 10 per litre on diesel by the Centre, the VAT rate in the state automatically reduced by Rs 1.8 per litre on petrol and Rs 2.6 per litre on diesel.
“Due to this, there will be a loss of about Rs 1,800 crore per year in the VAT revenue of the state,” the release said.
He said that to give relief to the people of Rajasthan from the ever-increasing prices of fuel, the state government had reduced VAT by 2 per cent earlier in January this year.
Due to this, the state suffered a loss of Rs 1,000 crore per year in VAT revenue.
“In this way, the burden of total revenue loss of Rs 2,800 crore per year has come on the state,” he said.