VAT on petrol, diesel prices will not be hiked in this state

In a relief to daily commuters in Uttar Pradesh, the state government has decided not to increase Value Added Tax (VAT) on petrol and diesel prices in the near future. Yogi Adityanath, Chief Minister of Uttar Pradesh, made the announcement on Friday, saying that VAT on both fuel is the lowest offered in any state across India. As of today, petrol price in Lucknow, capital of Uttar Pradesh is currently at ₹96.36 per litre, while diesel costs ₹89.56 per litre. In Noida, the business hub of the state, petrol costs ₹96.69 per litre and diesel is priced at ₹89.86 per litre.

The decision was taken after the chief minister reviewed the status of revenue collection in the state. Adityanath said, "Keeping in mind the larger public interest, we have not increased the rate of VAT or imposed any new tax in the state. Today the lowest VAT rate on petrol/diesel is in Uttar Pradesh. There will be no increase in VAT in the near future as well. Keeping this in mind, efforts should be made to increase the revenue collection according to the zone-wise potential."

Before reducing VAT on petrol and diesel, the Uttar Pradesh government used to charge sales tax of around 26 per cent per litre on petrol. The amount is around ₹19 per litre when roughly converted. After the Centre reduced VAT on petrol by ₹7 per litre earlier this year the state government slashed excise duty and VAT on petrol by ₹12 per litre. It currently imposes VAT of about ₹15.84 per litre on petrol besides the excise duty by Centre, which is around ₹28 per litre.

The VAT on petrol and diesel were reduced in Uttar Pradesh after the Centre decided to slash taxes on both fuel earlier this year. The reduction in price of petrol and diesel came as a relief after several consequent hikes in fuel prices which soared to an all-time high in May this year.