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Delhi Petrol dealers association has written a letter to Chief Minister Arvind Kejriwal asking to cut Value Added Tax (VAT) on petrol and diesel. According to the dealers, the reduction in VAT will boost sales and might prevent financial crisis. It said that Delhi has become expensive by more than ₹9 in petrol and ₹2 in diesel than neighbouring states of Haryana and Uttar Pradesh.
"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 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. As per the letter by the dealers association, 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.
Since 2014, the VAT on fuel has increased six times in the national capital. The last time, Delhi government hiked the VAT was on July 31, 2020 on both the fuel products.
The petrol sales have come down from a monthly average of 11 crore litres in 2014 to 8 crore litres, according to Narain.
He said that the sales of diesel have more than halved from over 13 crore in 2014 to just over 5 crore litres at present. 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 the moment, the cost of one litre of petrol in Delhi stands at ₹104.10 while in Noida it is ₹95.49, in Gurgaon ₹95.88, and Ghaziabad ₹95.24, respectively.
Both Uttar Pradesh and Haryana slashed VAT on petrol and diesel by ₹12 per litre last week. The move came as the Centre reduced excise duty by ₹5 per litre on petrol and ₹10 a litre on diesel amid spiraling fuel prices.
Narain has 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.
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