New Delhi: Citizens of Delhi will have to pay more for virtually everything from tea and coffee to cooking gas and diesel, with the Delhi government on Monday withdrawing the subsidy on liquefied petroleum gas (LPG) and increasing the value-added tax (VAT) on many items to generate additional revenue.
Finance minister A.K. Walia announced the withdrawal of the Rs40 subsidy on LPG cylinders for domestic consumers besides an increase in VAT for diesel and compressed natural gas (CNG).
With an increase in VAT from 12.5% to 20%, diesel will now cost Rs35.29 per litre in the Capital. At present, it costs Rs32.92 per litre.
A 5% tax has been imposed on CNG, the fuel used for public transport vehicles such as buses and auto-rickshaws. At present, there is no VAT levied on CNG. He also proposed an increase in VAT on items including household plastics, kerosene stoves, tea, coffee, utensils and cutlery items as well as fertilizers.
Noting that there has been an increase in expenditure in last two years on Commonwealth Games-related projects, Walia said revenue collection had been dented by last year’s economic downturn. “Therefore, it has become essential to look for measures to generate additional revenue to sustain development.”