CHANDIGARH: The petrol and diesel prices are all set to get dearer in Punjab, as state government has decided to increase value added tax (VAT) by 0l.5 per cent.
With the increase in VAT rates, the retail price of petrol and diesel will increase by 42 paise a litre and 30 paise a litre, respectively.
“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 JP Khanna said.
In its meeting held yesterday, the Punjab Cabinet 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,” said Punjab Excise and Taxation Commissioner A Venuprasad.
Presently, Punjab levies VAT at a rate of 27.50 per cent on petrol and 8.8 per cent on diesel.
With the increase in VAT rates, the new rate of VAT on petrol and diesel will be 28 per cent and 9.3 per cent.
Moreover, 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.
From petrol, diesel, ATF and LPG, the state government collects tax revenue of close to Rs 2,000 crore annually.