Punjab is losing over Rs 100 crore annually on account of higher value added tax (VAT) on petrol. As a result, consumers are turning to neighbouring states where the commodity is cheaper.
Punjab charges about 27.5 per cent VAT on petrol, while it is 22 per cent in Chandigarh and 20 per cent in Haryana.
Speaking to Business Standard, Punjab Petroleum Dealers Association president J P Khanna said petrol was almost cheaper by Rs 5 in Chandigarh and Haryana as compared with Punjab.
While normal petrol is priced at Rs 40.51 and Rs 40.60 a litre in Chandigarh and Haryana respectively, Punjab sells it for Rs 44.94 a litre.
According to excise officials, though it’s difficult to ascertain the exact revenue loss, rough estimates put it at about Rs 100 crore annually.
Punjab has over 2,700 petrol pumps and consumes about 5,500 kilolitres daily. The state government earns VAT to the tune of 30 per cent from the sale of petroleum products.
In order to boost sales, Khanna said the state government should bring the VAT rate in Punjab on a par with neighbouring states and abolish the entry tax, which is being charged at one per cent from pumps owners within the municipal limits.