Delhi: Petrol dealers’ body calls for cut in VAT

NEW DELHI: Urging the AAP government to reduce value added tax (VAT) on petroleum products, Delhi Petrol Dealers Association (DPDA) on Thursday said the sale of diesel in Delhi had decreased due to higher rate in comparison to the neighbouring states.
In a letter to chief minister Arvind Kejriwal and deputy CM Manish Sisodia, DPDA said that despite easing of lockdown in a graded manner since the first week of May, petrol pumps in Delhi registered 79% less sale of diesel last month, compared with the same period last year. The association said this happened after Delhi government increased VAT on both diesel and petrol to a historic high.

With its revenue collection down to just 10%, Delhi government increased VAT on diesel and petrol to 30% from 16.75% and 27% respectively. This led to an increase of Rs 6-7 per litre in diesel prices in the capital in comparison to the neighbouring states of Haryana, Uttar Pradesh, Punjab and Uttarakhand. Petrol dealers said due to this Delhi lost a big share of diesel sale to the neighbouring states.
No immediate reaction was available from Delhi government on the issue.
“The decision to increase VAT, though taken to increase revenue, was proving to be counter-productive as Delhi was losing both sales and revenue,” DPDA president Anil Bijlani said.
According to DPDA, VAT on fuel was increased to the highest slab of 30% (it couldn’t be increased beyond that) on May 5. “The sale of diesel dropped in April by about 84%. Even with partial unlocking of the state in May, the drop in sale was still 79%, while it improved considerably in the neighbouring states of Haryana and Uttar Pradesh.
The association members said that if Delhi made diesel cheaper by Rs 2 per litre in comparison to other states, the government could earn maximum revenue through VAT due to increase in sale.