NEW DELHI :
The Delhi cabinet on Thursday announced a 13.25% reduction in the Value Added Tax (VAT) on diesel, making it cheaper by about ₹8.36 per litre.
"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.
Delhi had a higher VAT on diesel in comparison to neighbouring states. The government had increased VAT during the lockdown which had put pressure on state's finances. Approximately 15 states across the country had increased VAT on diesel.
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 petrol litre to mobilise revenue collections at a time when the global oil prices are extremely low.
“This isn’t the time to be complacent. We need to continue taking precautions. A big crisis ahead of us is how to revive the economy," Kejriwal added.
Delhi had one of the highest cases of covid-19 in the country. Over the last few weeks Delhi has seen a sharp decline in the number of cases. The government is expected to announce a slew of measures over the next few weeks to boost the economy. Kejriwal will also hold talks with traders and industry members in the next week.
“Over the last week we have been taking various steps to improve the economy of Delhi. There are a lot of industries and shops which were facing a shortage of people to work. The government launched a jobs website which has got a great response," Kejriwal said.