A
day after the Centre hiked fuel and LPG prices, the
Gujarat government has been flooded with proposals to
slash VAT on these products. Senior officials say the
government may consider the proposal. "We are in the
process of getting all relevant data on offtake of
petroleum products in the state. One of the various
options being considered is a cut in VAT rate," said
an official. At present, there is 4 per cent VAT on
domestic LPG, 24 per cent on diesel, and 26 per cent on
petrol. The government also charges education cess on
petrol and diesel.
While the state consumes 28,08,872 kilo litres diesel and 9,16,992 kilo litres petrol every year, there are about 33 lakh refills in LPG cylinders.
The tax collections from these three petroleum products is around Rs 350 crore — Rs 202 crore from diesel, Rs 120 crore from petrol, and nearly Rs 25 crore from LPG. Considering the tax collections, slashing VAT rates on petrol, diesel, and LPG may not make a big difference on tax revenues, believe many. The prime minister has appealed all chief ministers to cut sales taxs on petroleum products.
Source
: The Business Standard, India, dated
06/06/2008
