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Petrol and diesel prices are set to get costlier in Punjab, following the state government’s decision to hike value added tax (VAT) by 0.5 per cent, dealers said today.
Retail price of petrol and diesel will increase by 42 paise a litre and 30 paise a litre respectively with the hike in VAT rates, they added.
“Due to increase in VAT rates, there is going to be an increase of 42 paise per litre in petrol and 30 paise in diesel,” Punjab Petroleum Dealers Association President J P Khanna told PTI today.
Punjab Cabinet in its meeting yesterday raised VAT rate by 0.5 per cent from the existing rates, though declared goods have been exempted.
“The VAT rate has been hiked by 0.5 per cent across the board except gold and silver,” Punjab Excise and Taxation Commissioner A Venuprasad said.
At present, Punjab levies VAT at a rate of 27.50 per cent on petrol and 8.8 per cent on diesel.
With raise in VAT rates, the new rate of VAT on petrol and diesel will be 28 per cent and 9.3 per cent.
A surcharge of 10 per cent on VAT is also levied on petrol and diesel while Re 1 per litre as cess is imposed on petrol, fuel pump owners said.
Punjab collects tax revenue of about Rs 2,000 crore annually from petrol, diesel, ATF and LPG.
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