Oil products may attract Vat from next fiscal

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New Delhi, May 22: Petroleum products may attract value added tax (Vat) from next fiscal as is implicitly recommended by mid-term appraisal of the 10th Plan, empowered committee secretary Ramesh Chandra said on Sunday.

“We are not averse to imposing Vat on petroleum products, but we are for gradual expansion of Vat list. As they say, we hasten but slowly,” Mr Chandra told PTI here. At present, petrol and diesel are out of Vat, while LPG attracts Vat at 12.5%.

MTA, approved by the Cabinet on May 19, pointed out that many goods have been kept out of Vat, including petroleum products, which are basic to manufacturing and transport.

The report will now be put before the National Development Council (NCD) for approval. The meeting of NDC is likely to be held next month.

Explaining the rationale of keeping petroleum products out of Vat, the white paper released by finance minister P Chidambaram said that prices of these products are not fully market-determined.