Petrol, diesel costlier in Rajasthan after VAT hike by govt

Petrol and diesel turned costlier in Rajasthan from Sunday with the state government increasing the value added tax (VAT) on fuels by 4 percentage points.

The state government in a late-night order on Saturday announced a hike in the VAT rate on petrol from 30 per cent to 34 per cent and from 22 per cent to 26 per cent on diesel.

The effective rate of petrol and diesel in Jaipur will now be Rs 75.57 per litre and Rs 69.26 per litre.

In July last year, the state government had increased VAT by 4 per cent.

Fuel prices have remained almost unchanged in the country even as global crude prices have halved to around USD 30 a barrel due to coronavirus outbreak. The Centre on March 13 hiked the excise duty on fuels by Rs 3 per litre.

Rajasthan Petroleum Dealers Association President Suneet Bagai said that the increased rate will further affect the dealers.

Petrol and diesel pumps located in the border areas of neighbouring districts are on the verge of shut down due to the increased VAT rate. Demand is continuously decreasing," Bagai commented.

He said compared to neighbouring states, prices of petrol and diesel in the state are higher by Rs 5-10 per litre.

He said that revenue loss is due to decreasing sales and it is not wise to put burden on common people. The government should rather focus on generating non-tax revenue.

Terming it a corrective measure, the Congress government in July last year had reversed previous Raje government's decision to reduce the VAT on petrol and diesel by 4 per cent.

At that time, VAT on petrol was 30 per cent, which was brought down to 26 per cent and VAT on diesel was reduced from 22 per cent to 18 per cent.

The state government through a notification on July 6 had increased VAT rate on petrol from 26 per cent to 30 per cent and 18 per cent to 22 per cent on diesel.