NEW DELHI: Soaring fuel costs in Delhi are hampering Value Added Tax (VAT) revenue for the capital, according to figures released by the government. According to figures from the Department of Trade and Taxes for October, fuel sales have dropped by 30% from September. This amounted to an additional loss of Rs 43.18 crore.
Currently, the government levies 27% VAT on petrol and 16.75% on diesel. Dealers in the capital have been demanding for a cut in these rates. The Delhi Petrol Dealers Association (DPDA) had staged a strike on October 22, after its demands were rejected.
On October 4, the Centre had reduced the central excise duty on fuel by `2.5 per litre on petrol and diesel. Soon, several states including Chhattisgarh, Jharkhand, Tripura, Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Haryana Assam, Uttarakhand, Goa, Arunachal Pradesh, and Bihar joined in and cut VAT rates accordingly. Delhi, however, did not due to which, diesel rates are at their highest ever.
“Every month, we post varying sales figures. There are other factors, too, which impact the sale of fuel. However, had the VAT been reduced by `2, it might not have led to the additional loss,” an official from the department said, refusing to be named.
Traders however, claim that Delhi locals are going to neighbouring states for fuel. “We met the deputy CM [Manish Sisodia] and gave him all the numbers regarding the dip in sales, but the response was ineffective. Due to the price difference, there was a drop of around 30% in sale of petrol and diesel in Delhi. Both the fuels are cheaper in Uttar Pradesh and Haryana. Because of the low prices there, customers are ignoring petrol pumps in Delhi,” Nischal Singania, president of the DPDA, said.