Punjab Increases VAT On Petrol, Diesel By 90 Paise, Expected To Earn Rs 300 Cr Annually

The Punjab state cabinet approved the government’s decision to impose 90 paise VAT on petrol and diesel to earn an additional revenue of Rs 300 crore annually. This is being considered as a big move in the cash strapped state. The move was given a nod in the cabinet meeting on Friday. 

The cabinet meeting was chaired by Chief Minister Bhagwant Mann.

Addressing the media after the meeting, the state’s Housing and Urban Development Minister Aman Arora said that a cess of 90 paise has been imposed on Petrol and diesel. "Cess (VAT) has been imposed because, for a long time, its need was felt.. and I think Punjab today needs revenue generation," he said.

When asked how much cess has been imposed, Arora said it will be 90 paise per litre on petrol and diesel. 

A government statement stated : "The Cabinet gave its approval for a marginal increase in the VAT rate levied on the sale of petrol and diesel in the state. The increase in the VAT rate will lead to a marginal increase in the price of petrol and diesel by approximately 90 paise per litre. This will bring more parity in prices of Petrol and Diesel in comparison with neighbouring states," 

This is the first tax on fuel imposed after the Aam Aadmi Party came to power last year.