India, April 4 -- The Maharashtra State Road Transport Corporation (MSRTC) has approached Chief Minister Devendra Fadnavis over a diesel procurement plan that could save the transport body Rs.82 crore annually but trigger a Rs.304 crore loss to the state exchequer. Fadnavis has asked the finance department to find a middle path.

The issue stems from bids floated to procure 41 crore litres of diesel for MSRTC's 14,320 buses. Of the five oil companies that responded, four proposed supplying fuel to 94 depots from Gujarat and Goa, where VAT rates are lower than Maharashtra's 21%. For Gujarat, the rate is 14.90%, and it stands at 18.09% in Goa.

While the move would reduce fuel costs, it would divert tax revenue to neighbouring states. The t...