Highlights:
- The Delhi government decreased VAT on fuel from 30% to 19.40% on Wednesday.
- Following the drop, petrol prices in the national capital will be slashed by Rs.8 per litre.
- After the deduction, the price of fuel would fall from Rs 103.97 per litre to Rs 95.50 per litre.
The state government decided on Wednesday to decrease the Value-Added Tax (VAT) on fuel from 30 percent to 19.4 percent, which will be a great relief for Delhi residents. As a result of the VAT cut, the national capital’s petrol price would fall by Rs 8 per litre.
After the VAT reduction, the price of fuel would fall from Rs 103.97 per litre to Rs 95.50 per litre. According to the price-build-up accessible on the IOCL website, the current pre-VAT fuel price in Delhi is Rs 79.98, with the VAT component being Rs 23.99. VAT will now be reduced to Rs 15.52 as a result of the VAT decrease.
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It is important to note that the price of petrol in Delhi was higher than in the NCR cities of Uttar Pradesh and Haryana, whose state governments announced a VAT decrease after the Centre’s reduction in excise duty on fuel prices last month. As a result, Delhiites were travelling to NCR cities to fill up on petrol, harming the revenue of petrol pump owners in Delhi as well as the state’s VAT collections.
It should be remembered that fuel prices have been steady for the past 27 days. On November 4, the government decreased excise duty on diesel and petrol to bring fuel prices down from record highs.
In Delhi, a litre of petrol costs Rs 103.97 and diesel costs Rs 86.67.
Meanwhile, worldwide crude prices, which are important deciding factor of petrol and diesel prices in India, have dropped by more than 10% in recent days. As a result, fuel costs may fall much lower in the following days.
The VAT on petrol in Delhi was raised to 30% in July 2020 last year. During the same time period, the VAT on diesel climbed to 16.75 percent. In the national capital, the VAT on petrol has climbed six times since 2014.
