The Delhi government will not raise its tax rates on petrol and diesel, Finance Minister Manish Sisodia said on Wednesday.
The development comes a day after he attended a meeting with four other northern States and the Union Territory of Chandigarh where it was mutually decided that uniformity would be brought in the tax rates on fuels in the participating States.
Speaking to The Hindu on Wednesday, Mr. Sisodia said Delhi had already agreed to the idea of a uniform rate in 2015.
“The [Tuesday’s] meeting was to rework the harmony and do away with the arbitrage,” Mr. Sisodia said.
‘Have lowest rates’
“In Delhi, we already have the lowest rates and we will not increase our rates. Other States may bring down their rates. So, now the committee of officers will work on it,” he said
Finance Ministers and officials of Haryana, Punjab, Himachal Pradesh, Uttar Pradesh, Delhi and Union Territory of Chandigarh had come together in Chandigarh on Tuesday and agreed to bring uniformity on the rates of petrol and diesel.
“A sub-committee will be constituted. It will convene a meeting in the next 15 days and all participating States will give their recommendations on bringing uniformity to fuel prices,” Haryana Finance Minister Captain Abhimanyu had said following the meeting.
On May 21, 2015, the Delhi government had organised a meeting in Delhi with Haryana, UP, Punjab and Himachal Pradesh in order to “harmonise” the rates, a senior Delhi government official said. After this meeting, the Delhi government had in July 2015 hiked VAT on petrol and diesel from 20% to 25% and 12.5% to 16.6% respectively. In January 2016, the VAT rates were hiked again to 27% for petrol and 18% for diesel.
While the rates levied by Delhi, Haryana and U.P. had been “harmonised” since 2015, Punjab levies a VAT of 35% on petrol, the official said, adding that “minor distortions” had remained. On an average, Delhi earns about ₹550 crore a month from VAT on petroleum products, Delhi government records show.
Consistent excise policy
Captain Abhimanyu said that on the advice of Delhi, a consistent excise policy for all the northern States is also being deliberated upon so that there is uniformity of rates of liquor among northern States.
“Likewise, Punjab suggested that there should be uniform policy for State transport so that there should be no loss of revenue from registration and permit fees since many trucks and vehicles of Punjab and Haryana have their registration from other States. A committee of officials has also been set up to look into excise and transport issues, which will send the report to their respective State governments on the uniformity of rates,” said Captain Abhimanyu.
