VAT on diesel doubled during SADBJP rule, petrol too got dearer

CASH COW Punjab chief minister has called a meeting today to take a call on slashing the fuel rates in the state

CHANDIGARH : The Shiromani Akali Dal (SAD) has threatened a stir if the Captain Amarinder Singh government fails to cut state taxes on fuel as Punjab’s Value Added Tax (VAT) on petrol is the highest in north India and diesel too is dearer than some neighbouring states.

The CM has called a meeting on Monday to decide on the possibility of slashing state taxes after comparative analysis of VAT rates in neighbouring states.

However, the trend in the growth of VAT rates in Punjab reveals that these saw a steep rise after the SAD-BJP regime came to power in 2007. In 2008, the VAT on petrol was 27.5% in Punjab and 8.8% on diesel. By 2016-17 when the Akalis went out of power, VAT on diesel had doubled to 17% and VAT on petrol, too, had touched the highest in north India, at 37%. With fuel prices shooting through the roof over the past year or so, there has been little change in these state rates under the Congress.

The VAT revenue from fuel had been the previous government’s cash cow too. It grew from ₹4,179 crore in 2014-15 to ₹5,658 crore in 2017-18. But the lower rates in neighbouring states threaten this upward trend.

Haryana’s revenue has jumped from ₹5,112 crore to ₹7,655 crore during 2014-2017, which is ₹2,000 crore more than Punjab. Punjab is also losing to Chandigarh where petrol is ₹10.55 per litre cheaper and diesel costs ₹3.91 per litre less.

“There is a growth of 19% in the sale of petrol and 78% of diesel in Chandigarh, while Punjab’s revenue collection in the year 2017-18 has decreased by ₹175 crore as consumption has gone down by 10.5%. The petroleum dealers of Punjab too are facing huge losses,” says the Petrol Pump Dealers Association of Punjab (PPDAP).

Its president Paramjit Singh Doaba says an ‘oil mafia’ is thriving in Punjab due to the variation in tax structure with neighbouring states. “Now that the Centre has slashed fuel rates by ₹2.5 per litre and Punjab’s neighbouring states have followed suit, diesel sales in Punjab can dip by 50% and petrol by 15%, if it refuses to rationalise its taxes,” he added. The association has threatened to launch a stir if the state government does not heed its demand to bring parity in fuel rates.