Haryana government on Tuesday raised VAT on diesel to 12.07%, which will yield additional revenue of Rs 737 crore to the state exchequer.
This decision on revision of VAT on diesel was taken by the Haryana Cabinet which met under the chairmanship of Chief Minister Manohar Lal Khattar in Chandigarh on Tuesday. The Value Added Tax (VAT) on diesel has now been raised from existing 9.24 per cent to 12.07 per cent.
Even after increase in the rate of VAT on diesel, its price would be lower compared to rates prevailing in neighbouring states of Punjab, Delhi, Rajasthan and Uttar Pradesh, said an official statement.
After the increase in VAT, the retail sale price of diesel with revised tax rate would come around Rs 53.19 per litre which is still lower by Rs 4.13 as compared to the price on October 1, 2014, it said. The average sale of diesel in Haryana is around five lakh kilolitres per month.
Due to decrease in retail price of diesel, Haryana was losing about 47 paise per litre since October 1, 2014 which comes to about Rs 23.50 crore per month, it said. To compensate this "recurring loss", the state has approved hike in VAT as per which additional revenue of about Rs 737 crore per year would be generated, it said.
The Cabinet also approved the Haryana Value Added Tax (Third amendment) ordinance 2014 for amending section 59 and 60 of Haryana Value Added Tax Act 2003 as per which state government is satisfied with the circumstances which render it necessary to take immediate action for reasons to be recorded in writing, dispense with the condition of previous notice, it said.
The neighbouring state Punjab had earlier raised VAT on diesel by 1.5% to 11.25% with effect from November 15. Punjab also levies 10% surcharge on VAT rates.
Interestingly, Union Territory Chandigarh had slashed VAT on diesel from 12.5% to 9.68% in order to bring parity with the tax rate in Punjab, thus giving a relief of Rs 1.40 per litre in diesel rates.
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