NEW DELHI: The current hike in VAT on petrol and diesel along with the corona cess on liquor will earn Rs 300 crore revenue in a month for the Delhi government, officials said. During normal circumstances, the Delhi government generates revenue of Rs 5,000 crore from excise and Rs 30,000 crore in VAT and Goods and Services Tax (GST) every year.
However, no private liquor stores, restaurants, pubs and bars are allowed to operate during the lockdown so the operations are cut down to just around 20 per cent — which is government-run wine shops, so the 70 per cent additional cost in addition to the original price will earn the around Rs 100 crore to Rs 150 crore per month.
Similarly mass movement is restricted in Delhi, hence the consumption of fuel is very low, which as per estimates could generate a revenue of Rs 150 crore for a month under the new prices.
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In order to make up for the lost revenue due to lockdown, the AAP government has announced steep hike in auto fuels, increasing the Value Added Tax (VAT) by almost double on diesel and similar for petrol.
Petrol in the national capital now costs Rs 71.26 a litre as compared to Rs 69.59 previously and diesel cost Rs 69.39 per litre from Rs 62.29 earlier. The new fee will be levied 70 per cent of the maximum retail price which means if a bottle of liquor is Rs 1000, Rs 700 will be the special corona fee amounting to Rs 1,700 in total. The nationwide lockdown to curb spread of corona virus spread has left Delhi government’s coffers dry.
Chief Minister Arvind Kejriwal had said that if the national capital continues to be in the red zone, the government will cease to function due to lack of capital eventually leading to unpaid staff.
Hence, to prevent such a scenario, the government has decided to put a special corona virus tax on liquor and almost 30 percent increase in VAT on petrol and diesel.