Punjab doubles sales tax on diesel
By Sarbjit Singh
Tribune News Service

CHANDIGARH, Oct 8 — While the people are yet to recover from the shock given by the Central Government by raising the diesel price by 35 per cent on October 5, the Punjab Government today doubled sales tax on diesel, raising it from 4 per cent to 8 per cent with immediate effect.

The average per litre price of diesel in Punjab will be Rs 14 approximately. With the jacking up of the price on October 5, the price of diesel has jumped from Rs 10.05 to Rs 13.51 in the state.

Besides diesel, Punjab has also enhanced the rate of sales tax on pulses from 2 per cent to 3 per cent and on packed and branded biscuits from 6 per cent to 8 per cent.

Punjab is a major diesel user state in both agriculture and transport sector. The SAD-BJP Government remained silent on the 35 per cent hike announced by the Centre whereas the Haryana Chief Minister, Mr Om Prakash Chautala, had protested against the hike strongly, seeking its rollback.

The ST hike is intended to improve the financial resources in the state and the revenue receipts.

The daily consumption of diesel in Punjab is around 7144218 litres. With the increase of price by the Centre on October 5 and doubling of ST by the Punjab Government, the diesel users will have to cough up Rs 950 crore annually. According to official sources, the state will buy diesel worth Rs 3600 crore in a year.

In Haryana, nearly 58,58,906 litres of diesel are used daily. The burden of hike ordered by the Central Goverment in diesel price in Haryana will be more than Rs 700 crore per year, it is learnt.

The steep hike in diesel prices will have a cascading effect. Already freight rates have been raised by private transporters, including truckers. The private bus operators have also started building pressure on the governments concerned in Punjab and Haryana to allow them to increase the bus fares.

According to informed sources, the price of bags of cement in Punjab and Haryana is expected to go up by Rs 10 a bag due to the increase in the freight charges by transporters and there would also be an increase in the prices of steel and other essential goods.

Punjab and Haryana are the states where essential goods come on trucks and other such modes of transport. The prices of edible oils have also started showing an upward trend.

While earlier, the Punjab Government had opposed the hike in diesel, now only Opposition parties have opposed the raise announced by the Centre. It would not be an easy job for the Punjab Government to tackle the criticism it expects to face due to the doubling the ST on diesel in the state.

Reports emerging from Delhi say that with the recent hike in the diesel price by the Union government, the overall rise in the price index will be near 1 per cent. In Punjab's case it is expected to be a bit more due to the hike in ST on diesel.