People in Chandigarh, the joint capital of Punjab & Haryana, would get some respite as the administration has reduced the VAT on petrol and diesel by 5 percent. The UT's administration announced that value added tax (VAT) on diesel/high speed diesel will be reduced from 16.40 per cent to 11.40 per cent. On the similar lines, the VAT on petrol and branded premium petrol was slashed from 24.74 per cent to 19.74 per cent. The decision to reduce tax on fuel was taken after the Union Government had asked the states to lower tax on fuel.
The new diesel price in Chandigarh after this reduction is Rs. 55.20 per litre, which is around Rs. 2.48 lower than the current rate of Rs 57.68 per litre. Similarly, the new petrol price in the UT is Rs. 65.66 from Rs. 68.40 per litre, down by Rs. 2.74 per litre, informed the fuel pump owners. And, with this VAT reduction, diesel in Chandigarh is now cheaper by Rs. 2.23 per litre as compared to its neighbouring district Mohali, which falls in the Punjab state. This reduction has widened the gap between petrol prices in Chandigarh and Mohali by Rs. 8.11 per litre as currently petrol price in Mohali is Rs. 73.77 per litre. Hence, fuel pump owners in the neighbouring cities like Mohali, Panchkula, Rupnagar expressed concerns.
"It will lead to a diversion of trade and our business will be severely hit," said Mohali based fuel pump owner Ashwinder Singh Mongia. Recently, there has been quite an uproar in public due the extremely high fuel prices, despite the crude oil prices quite low globally. Moreover, the fluctuation in prices on a daily basis further made the matter worse. People also raised their voice as why the fuels were not brought under the recently introduced Goods & Service Tax (GST). Hence, the Centre requested all the states to reduce the VAT on the fuels so that the prices can go down to a certain level and there is some relief to the public. Therefore, several states including Gujarat, Maharashtra, Uttarakhand, Madhya Pradesh and Himachal Pradesh reduced the VAT on the fuel prices.