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Petrol Pump owners in Delhi demand VAT cut on Diesel

Pump operators are seeking a cut in diesel taxes in Delhi to entice users to fill up, after being hit by a slow down due to cheaper rates in neighbouring Haryana.

While Haryana has a value added tax of 9%, it is 12% in Delhi, leading to motorists filling up in suburbs like Gurgaon, instead of at Delhi’s pumps. The difference in price has hit business in Delhi.

According to the Delhi Petrol Dealers’ Association, till the year 2008 when Delhi and Haryana had the same VAT rate on diesel, the sale of diesel in Delhi was around 15,000 kilo litres per month. “That has now come down to around 8,000 kl per month and while the sale of diesel is down about 50 per cent in most of the filling stations, in the stations close to the Haryana border, the sale is down to just about 25 per cent of what it used to be,” Rajeev Jain, spokesperson of the association, said.

The petrol dealers insist that Delhi Government is losing around Rs.400 crore in VAT collections due to its “rigid stand”. “The collection from VAT on diesel was around Rs.600 crore at the rate of nearly Rs.30 per litre in 2008, but it is now down to around Rs.420 crore, whereas it should ideally have been between Rs.800 crore and Rs.900 crore by now as the rate has also increased to Rs.45 per litre.’’

“Trucks now buy diesel from outside Delhi and so it makes no sense to keep higher rates here. Moreover in Delhi we were selling Euro IV diesel but when these trucks fill up in places beyond Panipat in Haryana they run on the more polluting Euro III diesel, and this only increases the pollution in Delhi,” he added.

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