PUDUCHERRY: In a bid to mobilise finance for COVID-19, the Puducherry government has enhanced VAT on petrol and diesel by one per cent.
While Petrol will be taxed at 22.19 per cent in place of 21.25 per cent, tax on diesel will go up to 18.15 per cent from 17.15 per cent.
According to the Commercial tax department notification, the new rates will come into effect from April 10. The additional revenue collected will be allocated to the Department of Health and Family welfare services, for incurring expenditure on COVID-19, in consultation with the Finance department, stated the notification.
As revenue is affected and the central government is yet to release funds and all expenses are being met from state funds. Hence to purchase medical equipment and meet other necessities of the Health Department, the government has resorted to the enhancement of tax on petrol and diesel.
The rates have been kept cheaper than Tamil Nadu, to tap the vehicles from the state moving through Puducherry to continue to fill diesel from the UT, sources said.