M A I N   N E W S

Diesel may cost 20 pc more
Tribune News Service

New Delhi, April 25
Farmers and diesel-run vehicle owners should be ready to pay more money out of their pockets, as the states have agreed to impose at least 20 per cent sales tax on diesel in states that have imposed VAT.

All states have promised to impose at least 20 per cent sales tax on diesel, Empowered Committee on VAT Secretary Ramesh Chandra said here today.

However, the exact decision on the issue will be taken at tomorrow’s meeting of state Finance Ministers, he told reporters after a meeting with state Sales Tax commissioners and other officials here.

“I am optimistic,” Empowered Committee Chairman Asim Dasgupta said in a response to a query on whether some kind of a breakthrough would be achieved on arriving at a consensus on uniform VAT rates.

Mr Dasgupta, who chaired the meeting for about half-hour, said variations in VAT rates were not significant but the issue was prime on the agenda of the meeting.

“ We are collecting information from all states,” he said.

As per the committee, every state had to agree on floor rate of sales tax on diesel at 20 per cent.

It implies that diesel prices could substantially increase in Punjab and Haryana since there is currently 8.8 per cent sales tax on diesel in Punjab, 12 per cent in Haryana. Recently, the Delhi Government had increased the sales tax on diesel from 12 per cent to 20 per cent. However, it has been complaining that after the increase in sales taxes, diesel sales have shifted to Haryana and Punjab due to lower sales tax.

A Punjab official coming out of the meeting said: “We have told the panel that we are imposing 8.8 per cent sales tax on diesel. We have said nothing more than that,” he said.


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