Rollback of vat on CNG unlikely

Though the BJP and a section of the ruling Congress are pressing for a rollback of the five per cent VAT proposed by the Delhi government in its budget, sources said such a move is unlikely.

Though the BJP and a section of the ruling Congress are pressing for a rollback of the five per cent VAT proposed by the Delhi government in its budget, sources said such a move is unlikely.

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“The VAT on CNG will not be withdrawn as it will not affect the common people in any way. We have levied only five per cent VAT on fuel and that is justifiable,” said a source.

Delhi chief minister Sheila Dikshit had proposed to impose the VAT on CNG on May 28. The move will help the government generate around Rs. 110 crore revenue.

The Delhi Assembly will take up the budget for approval on Monday. If the five per cent VAT is approved, CNG prices will go up to R37.20 per kg from current R35.45 per kg, a rise of R1.77.

According to sources, the government feels VAT in some of neighbouring states such as Haryana is quite high.

They said any increase in the price of the fuel would result in a hike in taxi and auto fares, which could have a negative effect on the party ahead of the assembly elections.

A number of auto-rickshaw unions had called a protest on Thursday demanding a hike in fares or a rollback.

“The move will result in a hike in auto and bus fares. We have requested the chief minister to withdraw the VAT on CNG,” said a senior MLA.

But in view of the increased pressure and the political implications, a last-minute rollback cannot be completely ruled out.