Chhattisgarh hikes VAT on petrol, diesel; prices rise by Rs 2.25 per litre

The prices of petrol and diesel in Chhattisgarh went up by a steep Rs 2.25 per litre after the state government increased the (VAT) on automobile fuels to 25 per cent on Thursday.

The VAT on petrol and diesel had come down to 21 per cent after the previous BJP government slashed it by four per cent in October 2018, ahead of state polls. The move was also in response to the Centre’s call to reduce the price of automobile fuels by Rs 2 per litre. The Centre had cut excise duty by Rs 1.50 per litre following skyrocketing prices of petrol and diesel.

The then state government has issued a notification for slashing the VAT rate on October 5, 2018. The order was effective till March 31, 2019. The Congress govt, led by Bhupesh Baghel, that came to power in November extended the notification period till March 31, 2020.

“In the interest of state’s revenue, the government has decided to abolish the concession and increase the VAT on petrol and diesel from 21 per cent to 25 per cent,” the notification issued by the state’s commercial tax department said. The hike is likely to earn Rs 250 to 300 crore to the state exchequer. It would be a big breather for the state government that had been reeling under severe financial crunch. 

Following the hike, the price of petrol will jump to Rs 73.10 per litre from Rs 70.85. Similarly, diesel price will go up from Rs 69.27 to Rs 71.52 per litre. The state government claimed that despite the increase, the price of automobile fuels in Chhattisgarh would be lower than the price existing in the neighbouring states.