Petro dealers seek 5% reduction in VAT

Sindri: The Jharkhand Petroleum Dealers Association on Saturday demanded the state government to reduce the VAT (Value-Added Tax) on petroleum products by at least 5 per cent.
Association president Ashok Singh told reporters that if the Jharkhand government reduces VAT by 5 per cent, it would incur a loss of just Rs 3.61 per litre which amounts to Rs 38 crore a month, whereas it would earn more than Rs 95 crore in the same period owing to the increased sales of petroleum products.
“The state government’s earning from petroleum products would increase by at least Rs 600 crore per annum,” he claimed.
After the central government decided to reduce the excise duty on petroleum products, 14 states, including neighbouring ones like West Bengal, Bihar, Odisha and Uttar Pradesh, have reduced VAT rates leading to a reduction in prices in those states.
Jharkhand has not yet reduced the VAT on petroleum products.
“As a result, the sale of petroleum products in Jharkhand has declined sharply,” Singh said and added that the sale of diesel in Jharkhand declined by nearly 20 per cent in October this year compared to the same period last year.
“Sales of petroleum products in Jharkhand have declined from 1.45 lakh kilolitres to 1.05 lakh as drivers of long-running vehicles like trucks prefer purchasing petrol or diesel from the neighbouring states of Bihar and West Bengal due to higher taxes here,” he added.
After the reduction in rates, Bihar charges 16.37 per cent VAT on petroleum products whereas the rate in Jharkhand still stands at 22 per cent plus Re 1 cess, which is the highest compared to all neighbouring states, Singh said and added that West Bengal has also reduced the VAT by Rs 3 on petroleum products.
Singh alleged that the Narendra Modi government has made taxation on petroleum products a political issue making people suffer on account of increased prices of essential commodities.
“Excise duty on petrol was Rs 9.60 during the UPA regime and Rs 3.60 on diesel. But the NDA government took it up to Rs 35 gradually. It reduced the excise duty in 2018 after adverse election results in some states and has again slashed it after the results in recently concluded polls in some states didn’t go in its favour,” he alleged.