Tamil Nadu

Fix VAT rates, say petroleum dealers

Suggest this could provide relief to motorists without any loss to the government

As petrol prices crossed ₹85 a litre and diesel ₹79 a litre in the city on Sunday, petroleum dealers suggest that the State government consider changing the way fuel is taxed.

Instead of collecting Value Added Tax (VAT) based on percentage, as it is being done, it could be a collected at a fixed amount per litre. This would bring down prices and help the common man.

At the same time, it would continue to bring income to the government, dealers affiliated to the Tamil Nadu Petroleum Dealers Association said.

Under the existing structure, the combined tax, which includes Central Excise and VAT on petrol, comes to around 35% to 55% of the total fuel price. For diesel, around 30% to 40% of the total price went towards taxes, said a dealer in Cuddalore.

“VAT could be a fixed rate, based on, say prices two months ago, which would mean that the government would not lose much and the consumer too would get some relief. In the last two months, petrol and diesel prices have gone up and have reached extraordinary rates. Motorists are taking out their anguish on dealers in many places,” a dealer in the city said, pointing to a recent incident in Kodambakkam, where a group of motorists asked for 27 paise in change, after filling a litre of petrol.

Cab drivers affected

The steady increase in diesel prices has led to many app-based cab drivers not accepting rides if payment is through credit or debit cards or the e-payment mode.

“I get the payment only after three days, which means I won’t have money for diesel. And the app has not increased the fares for a long time now,” said K. Kumaran, a driver from Choolaimedu.

Similarly, autorickshaw drivers said they were not able to fix rates for passengers, since the prices were changing daily.

“Sometimes I charge old rates, and then on the way ask the passenger if they would pay a bit more as the price of petrol has gone up. It is really embarrassing,” said Sivaraman, an auto driver from Old Washermanpet.

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Printable version | Mar 30, 2020 4:10:26 PM | https://www.thehindu.com/news/national/tamil-nadu/fix-vat-rates-say-petroleum-dealers/article24964986.ece

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