Delhi hikes VAT on petrol, diesel — check new rates

By: |
May 6, 2020 5:01 AM

Diesel prices in Delhi went up to Rs 69.39 per litre on Tuesday, a surge of Rs 7.10 per litres, as the state government increased the value added tax (VAT) on diesel from 17% to 30%.

The VAT on petrol has been raised by three percentage points to 30%, translating to a rise of Rs 1.67 to Rs 71.26/litre.The VAT on petrol has been raised by three percentage points to 30%, translating to a rise of Rs 1.67 to Rs 71.26/litre. (Representative image)

Diesel prices in Delhi went up to Rs 69.39 per litre on Tuesday, a surge of Rs 7.10 per litres, as the state government increased the value added tax (VAT) on diesel from 17% to 30%. The VAT on petrol has been raised by three percentage points to 30%, translating to a rise of Rs 1.67 to Rs 71.26/litre.

The surge in diesel VAT is the highest among the 13 state/UTs which increased their taxes on petroleum products to shore up their revenue in the middle of the coronavirus crisis. Delhi has earned Rs 2,811 crore through VAT from selling about 3.5 million tonne of petroleum product in the first three quarters of FY20. Total VAT on petroleum products collected by all states in April-December 2020 was Rs 1.6 lakh crore.

The development comes after retail prices in the national capital remained unchanged since March 16, despite fall in global crude prices.

Sector experts had pointed that states hiking VAT on petrol and diesel was on the cards after the Central government increased the rate of central excise duties on petrol and diesel by Rs 3/litre. The government has also used the Finance Bill 2020 to create room for increasing the taxes on auto fuels by up to Rs 8/litre.

State-run oil marketing companies had absorbed the rise in central excise duties and had not allowed the impact to be passed on to the retail consumers as they were earning comfortable auto fuel margins through static retail petrol and diesel rates amid falling crude oil prices. There was a downward trend in petroleum product prices from the second fortnight of January to mid-March.

Pointing at the high dependence of Centre and state governments on petrol and diesel for revenue, industry body Assocham said that “while this over-dependence needs to be brought down, there is a strong case for a national parity for prices of the automobile fuel”.

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