CHANDIGARH: Fule smuggling into Punjab has shot up in the face of state government’s refusal to cut the Value Added Tax (VAT) on petroleum products. Petrol in the state costs is Rs 10 more than in Chandigarh while diesel costs Rs 4 more. Smuggling operations are focusing on the neighbouring states of Himachal Pradesh, Jammu and Kashmir (J&K) and Haryana. The Punjab government charges 36.85% VAT on petrol and 17.25% on diesel, higher than the neighbouring states.
While Bharatiya Janata Party (BJP)-ruled Maharashtra levies 46.52% VAT on petrol, the highest in the country, Andhra Pradesh comes in second with 38.82%. Dealers in Chandigarh, who did not want to be named, said that the sales of both petrol and diesel have shot up by almost 80%. The combined sale for the period between April-Sept 2018 in the Union Territory (UT) stood at 97,000 kiloliters up from 54,000 kiloliters in the corresponding period last year.
Both diesel and petrol are smuggled into Punjab small tankers of 2,000 liters. According to sources familiar with the operations, petrol pump owners in Chandigarh and neighbouring states have allegedly built these small tankers to supply the fuel.
The savings on smuggled fuel are anywhere between `400 and `800 per drum of 200 liters, they said.
Punjab’s petrol dealers contend that the state is, in fact, losing revenue due to the high taxes. It is estimated that the state government will lose `1,000 crore annually if it does not cut VAT. According to figures from the Petroleum Planning and Analysis Cell of the Ministry of Petroleum, Punjab has earned `1,479 crore in VAT collections from petrol and diesel from 2014 to 2018. Whereas Haryana, earned `2,543 crore in the same corresponding period.
Ashwinder Singh Mongia, Executive Member of the Punjab Petrol Pump Dealers Association said, “VAT collections in Punjab from petroleum head are far lesser compared to figures of neighbouring states... The sales of petrol pumps in Punjab bordering other states and on all national and state highways abutting the other states have dropped by 50%. Out of the 3,380 petrol pumps in Punjab, 1,600 pumps are badly affected. The diesel sale in Punjab for 2017-18 was 33,58,828 kiloliters and petrol 8,44,607 kiloliters for 2017-18.’’ Punjab Chief Minister Captain Amarinder Singh has said his government would wait till the end of the month before taking any decision on fuel prices, as international prices of oil are fluctuating.