Prices of petrol and diesel in Punjab rose by Rs. 1.06 and 0.27 paise a litre respectively after the State government imposed 10 per cent additional tax effective from Friday on fuel.

The State government has made imposition of surcharge or additional tax effective from today on goods including petrol and diesel other than the declared goods under section 14 of the Central Sales Tax Act.

The move comes after the approval of Punjab cabinet to the report that suggested sweeping reforms in taxation structure to mop up additional revenue of Rs. 4,000 crore.

After the implementation of surcharge on VAT, petrol rates has shot up to Rs. 50.41, Rs. 50.38 and Rs. 50.39 a litre in Amritsar, Jalandhar and Ludhiana respectively. Similarly, diesel rates per litre now stands at Rs. 32.81 in Amritsar, Rs. 32.76 in Jalandhar and Rs. 32.79 in Ludhiana.

Punjab levies VAT at 27.5 per cent on petrol and 8.8 per cent on diesel. With the imposition of surcharge on VAT, the effective VAT rate on petrol and diesel worked out at 30.25 per cent and 9.68 per cent.

Chastising the state government for imposing surcharge, Punjab Petroleum Dealers’ Association President, J. P. Khanna said because of surcharge on VAT in Punjab, petrol prices in Punjab would be costlier by Rs. 5-6 a litre compared with petrol rate prevailing in Haryana and Chandigarh.