Diesel in Haryana is going to get costlier with the state government on Tuesday increasing the rate of value added tax (VAT) on diesel from 9.24% to 12.07%.
An official spokesman said that after the increase in VAT, the retail sale price of diesel would be Rs 53.19 per litre as compared with the existing Rs 52.04 pere litre. The decision to increase the tax on diesel was taken by the Council of Ministers on Tuesday with a view to garnering additional tax receipts and doing something about the bleeding coffers.
Taxation officials estimate an additional revenue generation of about Rs 737 crore per year from the increased tax rate. However, the decision to hike the tax is sure to come under fire from the opposition parties and farmers’ bodies.
An official spokesman, however, said that even after the increase in the tax, diesel would still be cheaper in Haryana as compared with the neighbouring Punjab, Delhi, Rajasthan, and Uttar Pradesh.
However, the Haryana price would still be higher than what it is in Chandigarh, where diesel is sold for Rs 52.94 per litre.
Justifying the tax increase, the spokesman said that in Haryana, the average sale of diesel was about 5-lakh kilolitres a month.
“Owing to the decreased retail price of diesel, the state was losing about 47 paise on each litre since October 1. It works out to about Rs 23.50 crore a month. To compensate for this recurring loss, the state has approved the hike in the tax on diesel,” he said.
The cabinet also approved the Haryana Value Added Tax (third amendment) ordinance 2014 for amending Section 59 and 60 of the Haryana Value Added Tax Act, 2003, under which the state government can, if satisfied with the circumstances that render it necessary to take immediate action for reasons to be recorded in writing, dispense with the condition of the previous notice.