New Delhi: The recent decline in oil prices has given state governments an opportunity to hike duties on fuel to raise tax revenue sources amid increased expenditure and loss of tax income due to the nationwide lockdown to curb the spread of COVID-19.
On Thursday, Haryana became the fourth state to hike duties on fuel. The state government decided to partially restore the VAT rate on the sale of diesel and petrol with an increase of Re 1.1 and Re 1 per litre, respectively.
As per the proposed amendment, the rate of tax will be restored to 25 percent (effective rate 26.25 percent with surcharge) on petrol and 16.40 percent (effective rate 17.22 percent with surcharge) on diesel.
Amid criticism, the Haryana government also hiked bus fare by 15 paise per km. For ordinary, luxury and super luxury buses in the state, fares have been hiked to Rs 1 per passenger per km from Rs 85 paise earlier, to partially meet the increased cost of operation of buses, an official statement said.
States of Nagaland, Assam and Meghalaya have also increased duties on petrol and diesel.
Assam government said that the increase was temporary to make up for the over 50 percent revenue loss that it predicts due to a decline in international oil prices. The state government said it receives an average of Rs 166 crore per month as royalties for oil from ONGC and Oil India Limited, which are estimated to fall to Rs 50 crore.
