New Delhi: In a letter to Chief Minister Arvind Kejriwal, the Delhi Petrol Dealers’ Association has asked him to cut Value Added Tax (VAT) on petrol and diesel in the national capital, reported the livemint. The reduction in VAT will boost sales and might prevent a likely financial crisis, the dealers said. Petrol has become costlier in Delhi by Rs 9 and diesel by Rs 2 than neighbouring states of Haryana and Uttar Pradesh, the letter noted.

“Higher VAT in Delhi will have a negative impact resulting in insurmountable loss of sales of petrol pumps of Delhi and revenue to our state,” Anurag Narain, President, Delhi Petrol Dealers Association reportedly wrote in the letter. “We request Delhi govt to decrease VAT, which might help during elections. Then our sales won’t go to other states; sales here have decreased by 50%,” Narain added.

The letter also highlighted the VAT structure of Delhi in the last few years. The VAT on petrol in the national capital has increased to 30% in July 2020 from 20% in 2014. On the other hand, the VAT on diesel increased to 16.75% from 12.50% in the same duration, according to the letter by the dealers association.

Top points to know for this big story:

  • Since 2014, the VAT on fuel has been increased six times in the national capital.
  • Delhi government last hiked the VAT on both the fuel products on July 31, 2020.
  • The petrol sales have reportedly come down from a monthly average of 11 crore litres in 2014 to 8 crore litres in 2021, Narain was quoted as saying.
  • The sales of diesel have more than halved from over 13 crore in 2014 to just over 5 crore litres at present, he added.
  • According to the dealers association, the average growth of sales in Delhi’s neighbouring states, such as Haryana and Uttar Pradesh has “double percentage figures”.
  • At present, the cost of one litre of petrol in Delhi stands at Rs 104.10 while in Noida it is Rs 95.49, in Gurgaon Rs 95.88, and Ghaziabad Rs 95.24, respectively.
  • Both Uttar Pradesh and Haryana slashed VAT on petrol and diesel by Rs 12 per litre last week. The move came as the Centre reduced excise duty by Rs 5 per litre on petrol and Rs 10 a litre on diesel amid spiraling fuel prices.
  • Narain along with other dealers have requested Delhi Chief Minster to reduce VAT more than Uttar Pradesh and Haryana to boost sales and revenue and to prevent the smuggling of fuels, the Mint report added.