Cheaper Diesel From Gujarat, Tamil Nadu May Save MSRTC Rs 194 Crore, But Cost Maharashtra Rs 668 Crore

Last Updated:February 24, 2026, 12:17 IST

On November 11, 2025, MSRTC floated an e-tender to buy high-speed diesel for its 252 depots. The tender allowed both in-state and out-of-state suppliers to quote rates.

The Maharashtra State Road Transport Corporation (MSRTC) has invited bids to buy diesel for its buses not only from suppliers within Maharashtra but also from companies outside the state. The move could significantly reduce MSRTC’s fuel bill, but it may also impact the state’s tax revenue.

On November 11, 2025, MSRTC floated an e-tender to buy high-speed diesel for its 252 depots. The tender allowed both in-state and out-of-state suppliers to quote rates. The last date to submit bids is February 26, and the contract will go to the lowest bidder.

The main issue is the difference in Value Added Tax (VAT) on diesel. Maharashtra currently levies 21% VAT. In comparison, Gujarat charges 14.90%, while Tamil Nadu levies around 11%. Because of this lower tax, diesel from Gujarat and Tamil Nadu could be much cheaper than diesel bought within Maharashtra.

It is estimated that if MSRTC purchases diesel from lower-VAT states at around Rs 78,000 per kilolitre, it could save nearly Rs 194 crore every year. Since fuel is one of MSRTC’s biggest expenses, this saving could provide much-needed financial relief to the transport corporation.

However, buying diesel from outside Maharashtra may lead to a major loss in tax revenue for the state government. As per estimates, Maharashtra could lose around Rs 668 crore if MSRTC stops buying diesel within the state.

So far, MSRTC has been purchasing diesel locally and paying 21% VAT, which contributes significantly to state revenue.

The situation has created a financial dilemma. If MSRTC buys diesel within Maharashtra, it will continue to support state revenue but face higher costs. If it buys from other states, it can reduce expenses but the state government may lose substantial tax income.

With the deadline for bids approaching, the final decision will be closely watched, as it will affect both the corporation’s finances and the state’s revenue.

News india Cheaper Diesel From Gujarat, Tamil Nadu May Save MSRTC Rs 194 Crore, But Cost Maharashtra Rs 668 Crore

Read More