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File photo: Petrol pump workers wear protective suit on duty during the nationwide lockdown in New Delhi. (ANI)
File photo: Petrol pump workers wear protective suit on duty during the nationwide lockdown in New Delhi. (ANI)

Delhi petrol dealers body demands roll-back of VAT hike, cites falling sales

  • The Delhi Petrol Dealers Association has said the increase in VAT has led to a 79% decline in diesel sales in the month of May.
  • It also said that Value Added Tax (VAT) on petrol and diesel was increased to the highest slab of 30 per cent on May 5 by the Delhi government.

Delhi Petrol Dealers Association (DPDA) on Thursday demanded a roll-back in the hike of VAT on petroleum products, saying the increase has led to a 79 per cent decline in diesel sales in the month of May.

According to the association, 1.73 crore litres of diesel was sold in May while in the same month last year, eight crore litres of diesel was sold in the national capital.

In a letter to Chief Minister Arvind Kejriwal, the DPDA said price disparity with neighbouring states like Uttar Pradesh and Haryana is taking its toll on sales of petrol pumps due to higher VAT.

It said Value Added Tax (VAT) on petrol and diesel was increased to the highest slab of 30 per cent on May 5 by the Delhi government. 

"There was 84 per cent drop in sales of diesel in the month of April. Even with the partial unlocking in May, there had been a 79 per cent decline in sales of diesel. However, Haryana and Uttar Pradesh have recovered most of their diesel sales," DPDA president Anil Bijlani said in a statement.

(Also read: Here's how much the Government stands to gain from hike in excise duty on fuel)

Nischal Singhania, past president, DPDA, said the primary reason for minimal recovery in diesel sales is the massive rate difference of around 7 per litre with neighbouring states, resulting in Delhi losing its sales and revenue to them.

The price of diesel in Delhi was  <span class='webrupee'>₹</span>69.39 per litre on June 4 while in Haryana and Uttar Pradesh, it was  <span class='webrupee'>₹</span>62.68 per litre and  <span class='webrupee'>₹</span>63.45 per litre respectively. (File photo used for representational purpose only).
The price of diesel in Delhi was 69.39 per litre on June 4 while in Haryana and Uttar Pradesh, it was 62.68 per litre and 63.45 per litre respectively. (File photo used for representational purpose only). (PTI)

The calculations show a loss of revenue to the tune of 58 crore per month due to higher taxes, Singhania said.

The body stated that in Delhi, the price of diesel was 69.39 per litre on June 4 while in Haryana and Uttar Pradesh, it was 62.68 per litre and 63.45 per litre respectively. In Punjab, it was  63.30 per litre, it said.

(Also read: Revenue loss during lockdown means fuel prices under GST unlikely in near future)

In the letter to the chief minister, DPDA said, "The reduction in rates would also give relief to the citizens of Delhi who will be inching towards normal economic activities with easing of (lockdown) restrictions from June 2020."

Diesel being an essential commodity also has an inflationary effect on prices of various commodities and services, which directly affects the common man, the body stated.

This story has been published from a wire agency feed without modifications to the text.

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