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NEW DELHI : The Delhi government on Wednesday announced a cut in the value-added tax (VAT) on petrol, following the recent tax rate cuts announced by the central and several state governments.

Chief minister Arvind Kejriwal said in a tweet that VAT on petrol has been reduced from 30% to 19.4%. “Petrol and diesel are cheaper in Delhi compared to other cities in the National Capital Region. I hope this step will bring relief to Delhiites from inflation," Kejriwal said in his tweet in Hindi.

Union petroleum minister Hardeep Singh Puri welcomed the decision and said he was happy that non-BJP states too were following the example set by the central government. The union government had on 3 November announced a sharp excise duty reduction of 10 a litre on diesel and 5 a litre on petrol offering a big relief to consumers on the eve of Deepavali. Following that, most states and union territories reduced taxes on petrol and diesel.

“I again appeal to the remaining six non-BJP states to reduce VAT on fuel and bring relief to the people," Puri said in his tweet. Wednesday’s decision by the Kejriwal government brings down petrol price by 8.56 a litre in Delhi. The new price after the tax rate cut would be 95.41 a litre, Puri’s tweet showed. The decision is effective from Thursday.

Among the states and union territories that have reduced tax on autofuel, Karnataka and union territories of Puducherry and Ladakh have announced sharp tax cuts leading to price relief in double digits.

However, the retail price of petrol and diesel also move in tandem with their rates in the international market. The tax cut is expected to help inflation cool down. Consumer price index (CPI) based inflation in October was at 4.48% compared to 4.35% in September and 7.61% in October 2020. 

 

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