VAT Hike Fuels Protest by Petrol Pumps

Protesting against the increase in VAT on diesel from 12.5% to 20%, all service stations in Delhi have decided to remain closed on Mondays. Following the hike in VAT, affected by the Delhi government in April, diesel sales have dipped by more than 40% in the capital, said the dealers. Yesterday, all the fuel stations in the city raised huge banners saying “Monday closed”.

“Due to the increase in VAT, diesel has become costlier in the capital. Now the commodity costs Rs 4 more in Delhi as compared to what it costs in Haryana. As a result, motorists are getting their vehicles filled in NCR towns such as Gurgaon and Faridabad,” said a dealer.

Notably, a similar 24-hour shutdown was observed by pump owners on May 14 to press for a rollback in VAT rates.

For his part, Finance Minister AK Walia says comparative VAT collection figures of 2009-10 and 2010-11 show that government’s revenue collections had increased even though the sales may be marginally down in the pumps that are near the borders. Also, he pointed out that lowering the VAT may result in a loss to the government on Central assistance.

Therefore, the uniform flow rate that has been prescribed will have to be followed, the finance minister affirmed.