Delhi govt cuts VAT, diesel to be cheaper
REVIVAL Reduction is aimed at boosting Delhi’s economy
nNEW DELHI: Delhi chief minister Arvind Kejriwal on Thursday reduced the value-added tax (VAT) on diesel from 30% to 16.75%, effectively slashing the fuel price by ₹8.36 per litre in the national capital. Currently, the price of diesel is ₹81.94 per litre in Delhi, much higher when compared to petrol, which is ₹80.43 per litre.
The new diesel rate will come into effect only after the Delhi government’s issues a gazette notification, which was yet to come till the time of going to the press.
“Together, we have to revive the economy after the coronavirus disease (Covid-19) pandemic. Currently, diesel is quite expensive in Delhi. It costs around ₹82 per litre. The Delhi cabinet has decided to reduce the VAT on diesel from 30% to 16.75%. This will reduce the diesel rate by ₹8.36 per litre. The move is likely to help revive Delhi’s economy,” the CM said during a video press briefing.
On May 4, the Delhi government had increased the VAT on both petrol and diesel to 30% from the earlier 27% on petrol and 16.75% on diesel. So, in essence, Thursday’s announcement amounts to a roll-back of the hiked VAT.
The reduction is aimed at increasing Delhi’s revenue, which had dipped by 90% in April because of the nationwide lockdown enforced from March 25, to prevent the spread of Covid-19.
KS Atwal, president of the All India Motor Transport Congress, welcomed the move and said it was a “big relief” for the transport industry. “The transport industry is under immense pressure ever since the lockdown was imposed. The additional VAT added to the stress. Hence, the roll-back of the hiked VAT has come as a big relief.”
Soon after Kejriwal’s announcement, AAP national spokesperson Raghav Chadha criticised the Bjp-led Union government for increasing the excise duty on diesel: “The AAP government’s decision will do miracles in reviving Delhi’s economy. On the other hand, the Bjp-led central government has adopted an extortionist approach. They should take a leaf out of the CM’S book and roll-back the hike.”
The Delhi BJP chief Adesh Gupta hit back saying it was the BJP which pressured the AAP government into rolling back the increased VAT on diesel: “Kejriwal should open his eyes and see how diesel rates in neighbouring states ruled by the BJP are already low. The AAP government unnecessarily increased diesel rates in the first place by increasing the VAT. We have pressured them into rolling back the additional tax element. Their claim against the BJP with regard to diesel rates is baseless.”