Gujarat petrol dealers demand Vat rebate

Ahmedabad, March 28 | Updated: Mar 29 2006, 05:30am hrs
The Federation of Gujarat Petroleum Dealers Association (FGPDA) has decided not to supply petrol and diesel from April 1, if the state government does not concede to their demands on the rebate on value added tax (Vat) on unsold stock in April.

From April 1, the state may not get petrol or diesel from our dealers point, warned Kiran Patel, President of FGPDA.

This is in view of the fact that the state has decided to give rebate on Vat on the stocks obtained in March but not cleared upto March 31. It has said this rebate on Vat will be released to the dealers only in July 06.

The dealers, however, are insisting that the rebate amount on Vat on unsold stocks (stocks not cleared by March 31) be paid to them in April. Their plea is that their money will be blocked for three months without any reason.

As Gujarat is implementing Vat with effect from April 1, petrol dealers will come under the purview of new tax regime. This means any unsold stock remaining till April 1, will also be subjected to Vat. Since the dealers have already paid the present sales tax on the stock, the government has decided to allow rebate Vat on unsold stock.

The proposed VAT is 26% on petrol, while diesel will be charged at the rate of 24%.

According to Mr Patel, a dealer will pay Rs 2,200 on 10,000 litres of petrol which is higher than the present sales tax regime.

Although the introduction of Vat system is expected to bring down incidence of evasion considerably, it will have an adverse impact on the prices of petrol and diesel, he added.