Ranchi, Oct 6 (IANS): The opposition parties have asked the Jharkhand government to reduce the Value Added Tax (VAT) to help the people reeling under high prices of petrol and diesel.

The Jharkhand Mukti Morcha (JMM), which is the main opposition party in the state, has threatened agitation if the VAT was not reduced to half from the existing 22 per cent by October 30.

"Our party will call a shutdown in the state if the state government fails to reduce the VAT by half on petrol and diesel by October 30," former Chief Minister and JMM Executive President Hemant Soren told reporters here.

He said that 22 per cent VAT has been imposed on petrol and diesel while a cess of Re 1 was also being collected per litre which means Rs 2,500 crore are being collected every year from the people.

The former Chief Minister compared the VAT rate of Jharkhand with the neighbouring states of Bihar, Odisha, Chhattisgarh and West Bengal. Jharkhand is collecting higher VAT in comparison to the neighbouring states.

"The Jharkhand government can provide relief up to Rs 5 per litre on petrol and diesel by reducing the VAT up to 50 per cent."

The Congress has also demanded reduction in the VAT rates and other duties to provide relief to the people.

"In 2014, the Congress backed JMM-led government had reduced the VAT to provide relief to the people of Jharkhand. Raghubar Das government should also reduce the VAT on petrol and diesel to help the farmers and common people. The central government should also reduce the excise and other duties to reduce the prices," Jharkhand Congress General Secretary Kishore Sahdeo told IANS.

"During the UPA government, petrol prices were Rs 71 per litre when the crude oil prices were Rs 130 per barrel. Now it is Rs 50 per barrel and Narendra Modi government is selling petrol at Rs 71 per litre in Jharkhand," he added.