Chandigarh: Already facing "massive" drop in sale of fuel, Punjab based fuel pump owners have sought from the state government not to raise VAT on diesel, saying this move will turn out to be "death knell" for them.
Under the banner of Punjab Petroleum dealers association, fuel pump owners rather asked the government to lower the tax rates on diesel in order to shore up their revenue.
"As the state government is pushing us to raise more revenue from fuel, we fear that the government will soon be revising VAT on diesel upward which will prove to be counter productive as it will hit not only dealers but also state's revenue," Association President J P Khanna said today.
He said that because of disparity in taxes, smuggling of fuel is rampantly taking place in areas which are near Chandigarh and Haryana.
Dealers claimed that there was a drop of about 15-20 percent in diesel sale of fuel pumps witnessed in border districts of Punjab after the state government raised VAT on diesel twice last year in order to increase revenue.
Daily sale of diesel in Punjab is 9,500 kilo litres, dealers said.
VAT on diesel in Punjab at present is 12.25 percent as against 9.68 percent in UT Chandigarh. Diesel in Chandigarh is cheaper by about 40 paise than that of Punjab.
Punjab government had raised VAT on diesel from 9.75 percent to 12.25 percent last year after retail prices of fuel dropped following lower crude oil prices.
"The government should understand lower the tax, more the revenue," he asserted, seeking level playing field for state petroleum dealers.
Petrol is already costlier in Punjab as against that of in UT Chandigarh and Haryana. Punjab imposes about 30.5 percent taxes on petrol making about Rs 6 per litre expensive than that of in UT Chandigarh.
Punjab annually collects about Rs 2,100 crore of tax from petrol and diesel.
A Committee under the chairmanship of MLA N K Sharma, BJP leader Narrotam Dev Ratti and representatives of state excise and taxation department has been constituted to resdress the grievances of state petroleum dealers.
"We will study the impact of sale of fuel vis a vis with Haryana because of tax rates. We will be meeting again to suggest measures to the state government to resolve the issues of fuel pump owners," Ratti said.
