CHANDIGARH: Due to the difference in prices of petrol and diesel in Punjab and Chandigarh, smuggling of fuel to the state is increasing. In the last five years, there has been continuous drop in sale of petroleum products in areas of Punjab.
Ashwinder Singh Mongia, President, Mohali District Petroleum Dealers Association (MDPDA) said Value Added Tax (VAT) rates of petrol and diesel have been successively reduced by Chandigarh Administration in October 2017 and then again in October 2018. Though Punjab government has reduced VAT of petrol by Rs 5 and diesel by Rs 1 per litre on February 18, fuel in Mohali costs Rs 4.90 per litre more for petrol and Rs 2.71 per litre more in diesel as compared to Chandigarh.
Mongia alleged that the difference in rate has prompted Chandigarh dealers to resort to smuggling of petroleum products to neighbouring districts of Punjab. Recently, a tanker illegally carrying diesel was apprehended by the mobile wing of Punjab Excise and Taxation Department at Mohali.
The sale of diesel in Chandigarh has grown by 105% in the last three years whereas the bordering districts of Punjab have lost 42% of sales during the corresponding period. Meanwhile, in all the 40 petrol pumps in Chandigarh about 70% of the customers belong to Punjab and Haryana.
Mongia said that the solution is to make the VAT rates in Chandigarh at par with Punjab or have dual pricing within Punjab with VAT rates in neighbouring districts of Punjab (Mohali and Rupnagar) at par
with Chandigarh.