VAT to blame for fuel price hike here?
Source: The Sangai Express

Imphal, September 10 2018: If the Value Added Tax (VAT) imposed by the State Government on petrol and diesel is not reviewed at the earliest, the prices of all related commodities and products may skyrocket leading to increased burden on the common people, particularly those who are earning daily wages.

According to a source from Indian Oil Corporation Limited (IOCL), the VAT imposed by the State Government on petrol and diesel products was revised on March 2, 2016 and during the revision, the VAT for petrol was increased from 20 percent to 25 percent while that of diesel climbed from 13.5 percent to 14.5 percent.

The source continued that at present, the price per litre of petrol in Imphal is Rs 78.79 while that of diesel is Rs 70.84 per litre.

Out of Rs 78.79 per litre of petrol, the State Government is taking VAT of 25 percent or Rs 19.69.If the State Government did not take the VAT amount, the price of petrol would have been just Rs 59.09 per litre in Imphal, the source claimed.

If the VAT is reduced to only Rs 9.848, then the price of petrol in Imphal would have been only Rs 68.94 per litre.

On the other hand, the source conveyed that the current price of diesel is Rs 70.84 per litre out of which 14.5 percent (Rs 10.27) goes to the State Government as VAT.

If the Government did not take the VAT amount the price would have been only Rs 60.57 per litre.

Or if the Government took only Rs 5.135 as VAT, the price would have been Rs 65.705.The source reasoned that if the State Government wants to decrease the sky high prices of petrol and diesel at a time when the price of crude oil has shot through the roof, the only logical way is to reduce the VAT imposed on the fuel.

On the other hand, the increasing price of fuel is most likely to increase the transportation charges of vehicles like merchant vehicles and passenger service vehicles.

If the transporters' charge increases, naturally all other linked items/commodities etc will also increase in price which in turn is sure to cause a big headache to the Government, the source stated.

It explained that as Manipur is a poor State and lacks resources, the Government has to collect revenue by means of VAT but even if the VAT amount is reduced by half, revenue will still come to the Government.

It also added that there are some Indian States like Goa for example which do not even impose any kind of VAT on petrol or diesel.

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