State petroleum dealers appealed Jharkhand Government to reduce the Value Added Tax (VAT) levied on petroleum products on the grounds that the present tax rates have made diesel and petrol costlier in Jharkhand in comparison to neighbouring States, translating to decline in sales here.
Presently, dealers have to pay Rs 15 per litre for petrol and Rs 8.37 for diesel or 22 per cent on both, whichever is higher, in addition to a cess of Rs 1 per litre as VAT.
West Bengal, Bihar and Uttar Pradesh have lower tax rates, due to which transporters and travellers prefer to buy fuel for their vehicles from these neighbouring states instead of Jharkhand, stated Jharkhand State Petroleum Dealers Association president Ashok Kumar Singh in a press conference on Tuesday.
An alarming decline of 23,546 Kl was observed in sales volume of diesel during April and May alone, Singh said. “Sales along NH-2 have gone down by 60 to 70 per cent. Heavy vehicles plying this thoroughfare get cheaper diesel in Uttar Pradesh on one end and in West Bengal on the other. If corrective measures are not taken soon, it will be fatal for petroleum sector in Jharkhand,” he added.
Meanwhile, West Bengal and Bihar are experiencing a growth in sale of petroleum products at Jharkhand’s expense, said Singh. “Jharkhand saw immense growth in diesel sales back in 2013-14 and 2014-15 when tax rates were lower despite dismal business at national level. Sales have gone down drastically due to higher VAT this year even with good national average,” he said.
According to the Association, had the VAT rates not been increased in February last year, the revenue earned by government had been higher than what it had considering the then growth rate of petroleum sector in Jharkhand.
“State Government earned Rs 1284.56 crores last year in VAT from petroleum dealers in Jharkhand against actual sale of 15.34 lakh kilolitres. With previous tax rates, the sales could have gone up to 18.41 lakh kilolitres, meaning Rs 1309.42 crores VAT to government,” said Singh.
Transporters, hauling petroleum products and goods both, farmers and commuters of Jharkhand, all have to suffer due to higher prices of diesel and petrol, he further said.
The Association demanded that the VAT rates are lowered in order to bring down prices as compared to neighbouring states ‘as it has always been in the past’. “VAT on patrol and diesel should be lowered rationally and fixed, like in West Bengal and Uttar Pradesh. Rs 8234 should be charged as VAT one every kilolitre of diesel and Rs 12, 340 per kilolitre of petrol. As per our estimation, these changes will not decrease revenue generation in any manner even if crude oil prices fluctuate,” Singh said.
The Association also submitted a memorandum to Chief Secretary Rajbala Verma featuring their demands and estimations. The further course of action will be decided after the memorandum is considered by the Chief Minister.