VAT up, diesel to cost more from today

Bhanu P Lohumi

Tribune News Service

Shimla, August 1

The price of diesel has gone up by Rs 2 per litre in Himachal Pradesh as revised the VAT rate on diesel came into force from midnight. However, the impact of the price hike was neutralised as the price of diesel was cut down by Rs 3.60 per litre and the net relief was Rs 1.60 per litre.

The state Cabinet, at its meeting on July 2, decided to increase VAT on diesel by 4.5 per cent from 11.5 per cent to 16 per cent to bring parity in VAT rates in the region. However, the rates in Punjab and Haryana are still marginally up at 17.29 per cent and 17.22 per cent, respectively.

VAT on diesel was the lowest at 9.68 per cent in Chandigarh, but the Administration increased VAT on diesel to 16.4 per cent in order to comply with the uniform tax structure in the region.

The state government would earn an additional revenue of Rs 75 crore annually from the hike in VAT, but its impact on consumers would be insignificant, said Excise and Taxation Commissioner JC Chauhan.