The Delhi government on Tuesday hiked the Value-Added Tax (VAT) on petrol and diesel. The VAT was increased by 3% on petrol (from 27% to 30%) and by 13.25% on diesel (from 16.75% to 30%).
This translates to an increase of Rs 1.67 and of Rs 7.10 on petrol and diesel respectively.
Petrol now costs Rs 71.26 per litre and diesel costs Rs 69.39 per litre in national capital of India Delhi. In the case of petrol, the price includes excise duty of Rs 22.98 per litre and VAT of Rs 16.44 per litre. In the case of diesel, the price includes Rs 18.8 excise duty and a VAT of Rs 16.26 on pet litre of sale.
The Delhi CM Arvind Kejriwal has raised the tax to earn a larger share from the fuel price. The state government has also increased the tax on liquor by 70 per cent. The state government which was known to give free amenities to its residents is now trying to find a window to collect more and more revenue. The government aims to take advantage of the cheap raw material and use this to increase profit to cut losses.