Petrol price is set to become costlier by over Rs 2 per litre in Haryana with the BJP led state government raising VAT on petrol by five per cent, which will fetch Rs 245 crore per annum in additional revenue.
“Haryana government has decided to amend the Value Added Tax (VAT) rate on petrol from 20 per cent to 25 per cent,” said an official spokesman here, adding that it would garner additional revenue of Rs 245 crore.
With the increase in tax, the price of petrol in Haryana will jump by about Rs 2.20 per litre to Rs 59.36 a litre. Before the hike in tax, petrol was priced at Rs 57.16/litre.
Despite the hike in tax on petrol, the fuel will continue to be cheaper compared to Punjab. In Mohali, petrol price rules at Rs 63.21 per litre.
However, petrol in Haryana will become costlier compared to UT Chandigarh. The price of petrol in Chandigarh is Rs 57.24 per litre.
Notably, petrol and diesel prices had been cut by Rs 2.42 per litre and Rs 2.25 per litre respectively by oil marketing companies earlier this\ month.
Significantly, the lowering of fuel prices are impacting the revenue of states as taxes on petroleum items are levied as per ‘ad valorem’ method whereby any increase or decrease in prices of fuel impacts the tax mobilisation.
The spokesman of Haryana Excise and Taxation department said after the increase, the new VAT rate on petrol with 5 per cent surcharge would be 26.25 per cent.
Earlier, the same was 20 per cent plus surcharge.
The rate of VAT being charged on petrol is 30.80 per cent in Punjab, 26.80 per cent in Uttar Pradesh, 30 per cent in Rajasthan and 27 per cent in Himachal Pradesh.
After the increase in VAT, the average retail sale price per litre would be Rs 59.36 which will be lower than the average retail sale price of Rs 74.12 per litre in Haryana as on July 1, 2014, he added.
Haryana government had on November 25 raised the VAT on diesel from 9.24 per cent to 12.07 per cent, which would yield additional revenue of Rs 737 crore to the state exchequer.