No cut in VAT on petrol, diesel in Rajasthan - Dhariwal

Rajasthan Home Minister Shanti Dhariwal on Wednesday ruled out the possibility of reducing value added tax on petrol and diesel in the State, saying any such move would directly affect the revenue collection. He said the tax on petrol products levied in Rajasthan was less than several other States. Mr. Dhariwal said in the Assembly during the Question Hour that the Government was bound by the recommendations of the Centre's high-power committee on VAT, which had favoured the levy of 20 per cent tax on petrol and diesel. “The State Government gets revenue to the tune of Rs.3,000 crore annually from tax on petrol products. If the VAT is reduced by even one per cent, there will be a loss of Rs.114 crore on diesel and Rs.29 crore on petrol,” said Mr. Dhariwal while replying to supplementary questions.
BJP MLA Kalicharan Saraf raised the issue through a written question while claiming that vehicles passing through Rajasthan were buying petrol and diesel from the neighbouring States because of their high prices here. The Minister's categorical refusal to reduce VAT led to noisy scenes in the House. Mr. Dhariwal also said there was no proposal under consideration to withdraw the cess imposed on petrol and diesel by the previous BJP regime for repairing of roads. He said the current practice, if any, of consumers buying petrol products from States such as Punjab and Haryana would end soon, as they too would be enhancing the tax rates shortly.