In a setback to city residents, diesel rates in Chandigarh will not be reduced to be on a par with Mohali from November 1 (Saturday) as had been announced. The decision has been taken after it came to light that the Punjab government is contemplating increasing VAT on diesel to bring it on a par with the existing VAT rate in Chandigarh.
Officials from Punjab and the UT excise and taxation departments had met recently, where the state’s officials let this be known.
UT finance secretary Sarvjit Singh said they would notify reduction of VAT on diesel, only if Punjab shelved its plan to increase VAT on diesel in state.
“The idea was to bring diesel prices on a par with Punjab. There is no point in going ahead with the decision of reducing VAT if Punjab decides to increase VAT on diesel,” said Sarvjit Singh.
Punjab imposes 9.75% VAT on diesel, while the UT taxes it at 12.5%. The administration had decided to reduce VAT after MP Kirron Kher took up the issue.
Kher said: “I will take up the matter with the administration again. It is sad that they did not reduce VAT when it was low in the bordering state, but now want it on a par with them, when they are planning to increase the rates.”