The Hindu Business Line : Delhi Govt to roll back diesel ST rate to 12.5 pc

LOSS of trade in diesel on account of lower tax rates in the neighbouring States of Punjab, Haryana and Himachal Pradesh has prompted the Delhi Government to roll back diesel sales tax rate from the current 20 per cent to 12.5 per cent.

Diesel is out of VAT as its prices are not fully market determined.

A decision to rollback the tax rate on diesel was taken here today at a meeting of the Cabinet of the Delhi Government. The Delhi Chief Minister, Ms Sheila Dikshit, chaired the meeting.

There was also some good news for consumers of sweets as the Delhi Cabinet decided to bring down the VAT rate on sweets from 12.5 per cent to 4 per cent.

The Delhi Cabinet, however, did not come up with any decision that would provide any price relief to consumers of Liquefied Petroleum Gas (LPG) in the National Capital Territory of Delhi.

Ms Dikshit said that the Delhi Government would propose to the Empowered Committee of State Finance Ministers on VAT that LPG be considered as a natural fuel and be kept out of VAT net.

Although diesel was out of VAT net, all States had agreed to maintain a uniform floor rate of 20 per cent for diesel. However, States such as Punjab and Haryana had expressed inability to raise their rates from 8.8 per cent and 12.5 per cent respectively to 20 per cent due to political compulsions.

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