State Government’s decision to set a ceiling for Value Added Tax on Petrol and Diesel met with strong criticism from business groups and political parties from all over the State on Wednesday.
In its meeting on Tuesday, the State Cabinet decided to fix the amount to be levied as VAT — Rs15 for every litre of petrol and Rs12.50 per litre of diesel, or charge 22 per cent of the petroleum product prices as VAT, whichever is higher.
This resulted in an uproar from the political parties and commercial associations on Tuesday. Federation of Jharkhand Chamber of Commerce and Industries criticised the move on the ground that it will result in increase in fuel prices, along with that of other commodities and will force majority of petrol pumps in the State to close their business and adversely affect the transporters.
“We might be selling petroleum products on cheaper rates now when compared to other States, but this decision will change this. After it is put to effect, diesel will be priced at Rs3.50 and petrol will be sold at Rs4.55 higher than in comparison to neighbouring States. This will encourage black-marketing of petroleum products from neighbouring States,” said Jharkhand Petroleum Dealers’ Association president Ashok Kumar Singh.
“This issue is directly linked to the public. Increase in diesel prices will lead to increase in transportation costs which will result in hike in prices of every commodity. Farmers will find it hard to afford fuel for their pump sets used for irrigation. local motorists will have to pay more for refuelling their vehicles and those coming in from other States will refrain from doing so in Jharkhand,” said JPDA General Secretary Sharad Dudani.
“This increase in price will hit the sales hard. In diesel alone, the current monthly sales of 1.2 lakh kilolitres will decrease to 40 to 50 thousand kilolitres. As soon as this decision receives official confirmation, most of the petrol pumps in the State will go out of business due to decline in sales,” Singh said.
He further added, “Since February, Government has ignored our pleas to initiate talks on VAT on petroleum products. So now, we have decided to go to Prime Minister Narendra Modi and talk to him directly, with a delegation of around one thousand of our members. We will stay in Delhi until our demands are met.”
Meanwhile, JPCC protested against the fixed VAT rates on Wednesday, demanding answers to ‘Kab aaenge achhe din’ (When will the (promised) good days come). “Decrease in petroleum prices in global markets will be of no good to the people of Jharkhand, due to this insensitive decision. loss of revenue might be cited as the reason behind this move, but it will only increase inflation,” said State Congress president Sukhdeo Bhagat.
Party Spokesperson Rajiv Ranjan Prasad stated, “last time BJP was in power, it increased VAT rates from 14.5 per cent to 22 per cent. It will be hard to fulfil the expectations of business class which followed World Bank ranking Jharkhand fifth in terms of ease of doing business.”
“This decision has made it clear that CM Raghubar Das is apathetic to the problems of common man, already burdened with price hike of daily commodities. It seems that the State Government could not tolerate that public was getting petrol and diesel at lowered prices and so is putting in efforts to increase the petroleum product prices,” stated former Union Minister Subodh Kant Sahay.
Commercial organisations too were not pleased with State Government’s decision to fix a limit for VAT rates on petroleum products.