The UT administration has increased with immediate effect the Value Added Tax on petrol (including branded premium petrol), motor vehicles, rice, coal, wheat and paddy and a notification in this regard was issued by the UT administrator here on Friday.
The VAT on petrol has been increased from 20% to 24.8% to bring the rates on par with the neighbouring states. With this the per litre petrol price in Chandigarh would go up by `2. Now, the petrol rate in Chandigarh is on par with Panchkula, but less than SAS Nagar.
The total tax on petrol in Punjab is 36.4%, while it is 26.5% in Haryana.
Similarly, VAT on motor vehicles has been increased from 12.5% to 13.2%. A vehicle costing `5 lakh earlier in Chandigarh will now be dearer by `3,500.
At present, VAT on motor vehicles in UT is 12.5%, while it is 13.2% in Punjab. The VAT on coal, rice, wheat and paddy has been increased from 4% to 5%.
The UT administration had earlier increased the VAT on diesel from 9.7% to 16.4%. Prior to that, city MP Kirron Kher had managed to get VAT on diesel reduced from 12.5% to 9.7%. Recently, the administration increased the luxury tax on banquet halls and hotels from 4% to 8%.
The petrol in Punjab now will be approximately `5.20 expensive than Chandigarh and Haryana. “The Punjab government should now consider bringing VAT on petrol on par with the neighbouring states. Parity in rate in the tricity will help revive the petroleum trade and put a check on smuggling, said Ashwinder Mongia, president of Mohali petroleum dealers’ association.
“The basic cost of petrol is not more than `30 and of `30 is tax. Out of the total rate, `18 goes to excise and `13 to the state. The largest consumption of petrol is by two wheelers as majority of luxury cars run on diesel, so that way we are putting the burden of taxes on the lower strata of society,” said Amanpreet Singh, secretary, Chandigarh Petroleum Dealers Association.
City-based advocate Ajay Jagga said if the hike in VAT on petrol was inevitable then the tax on food and beverages should have bean brought down from 12.5% to 5% on the pattern of Himachal Pradesh.
City Congress chief Pardeep Chhabra said, “The true face of BJP has come to the fore as before elections they promised the moon to people and now they have burdened them with huge taxes. We will hold protests in this regard.”