The Puducherry government has decided to enhance Value Added Tax on petrol and diesel by one per cent to mobilise additional revenue resources. Applicable from Friday, petrol would be sold at a tax rate of 22.15 per cent and diesel at 18.15 per cent, said a notification issued by the Secretary to Government, Finance, Shurbir Singh, on April 7.
“The additional revenue collected will be transferred/allocated to the Department of Health and Family Welfare Services for incurring expenditure on coronavirus pandemic,” the notification said. The change in VAT structure would increase the price of petrol and diesel by around 50 paise, said a senior official.
In a related development, the Finance Department had requested the heads of departments to postpone all non-essential expenditure till the first week of May. “There is a huge shortfall of revenue to the extent of ₹570 crore in the year 2019-20 due to various factors like non-receipt of GST compensation, poor performance in collection of targeted revenue by Excise and Registration departments. This has a direct bearing on the cash balance of UT,” Mr Singh said in an inter-departmental note issued on Wednesday.
Due to the nationwide lockdown, the normal revenue receipts from Excise, GST, Transport and Registration would be hit, Mr Singh observed. “Therefore virtually the government has to manage with a low cash balance which could be spent for emergency expenditure only. The quarterly Central assistance is normally released in May,” he said in the note.
Under the circumstances, the heads of departments should postpone all non-essential expenditure till first week on May, the ID note said.
A highly-placed source in the government told The Hindu that financial position had become very precarious. If the situation persists, disbursal of next month’s salary would itself be a difficult task, he added.
