Delhi

‘Govt. move to hike VAT on fuel counterproductive’

Petrol dealers’ body seeks relief

The Delhi Petrol Dealers Association (DPDA) on Thursday said that the Delhi government’s decision to increase Value Added Tax (VAT) on fuel, although taken with a good intention to increase revenue, is proving to be counterproductive as Delhi is losing both sales and revenue.

The association has requested the government to consider reducing VAT on petroleum products and give relief to the petrol dealers and the public at large.

The association also said that Delhi’s petrol pump dealers have lost 79% of diesel sales in May on a year-on-year comparison despite the lockdown restrictions being eased as the State increased VAT on both diesel and petrol to a historic high.

DPDA chief Anil Bijlani said, “The primary reason for minimal recovery in diesel sales is the rate difference of around ₹7/litre with neighbouring States, resulting in Delhi losing its sales and revenue to the adjoining States.”

He said that vehicles bringing in essential commodities to Delhi were fuelling from Delhi till May 5 but after the increase in VAT, they were fuelling from neighbouring States.

The association said that Delhi, as a State, can garner maximum VAT revenue by increasing sales if the Delhi government reverts the hike and reduces the VAT rates and keep it lower than the neighbouring States by at least ₹2/litre. The reduction in rates, it said, would also bring relief to the people of Delhi.

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Printable version | Aug 3, 2020 9:29:16 PM | https://www.thehindu.com/news/cities/Delhi/govt-move-to-hike-vat-on-fuel-counterproductive/article31752755.ece

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