On 30th July, Delhi Chief Minister Arvind Kejriwal has decided to reduce Value Added Tax (VAT) on diesel. The cabinet decided to reduce VAT on diesel from existing 30 per cent to 16.75 per cent (net 13.25% decrease), which will make it diesel price cheaper by ₹8.36.
“The cabinet has decided that the VAT on diesel will be reduced from 30% to 16.75%. This is a big reduction. We had a demand from traders to reduce prices and give the economy a push,” Delhi chief minister Arvind Kejriwal said while addressing a digital press conference.
The diesel price will now come down from ₹82 a litre to ₹73.64 a litre in the national capital. Kejriwal said that the move will help propel Delhi’s economy and that there was a serious need of reviving the economy of Delhi but it will be achieved together with equal help from the people
Delhi had a higher VAT on diesel in comparison to Haryana, UP and other states. The government had increased VAT during earlier part of May 2020 which had put pressure on state’s finances. Approximately 15 states had already increased VAT in India
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It may be recalled, earlier in May, the Centre had raised the excise duty on petrol by a steep ₹10 per litre and on diesel by ₹13 per litre to increase revenue collections at a time when the global oil prices are extremely low.
n India, the price of petrol and diesel you pay at the pump is dependent on International product prices and other market conditions. Petrol and diesel do not come under the purview of GST