Govt to review fuel price, invites public input
Source: Chronicle News Service

Imphal, August 20 2021: With demand for rolling back fuel price hike growing louder and keeping in view of the low revenue collection from sale of petroleum fuel, the state government has taken up steps to review/bring down the price of diesel and petrol by Rs 3.36 and Rs 2.70 respectively.

Sources said that the finance department's expenditure section issued a notification recently to reduce the value added tax from 22.5 per cent to 18 per cent on highspeed diesel and from 36.5 per cent to 32 per cent on petrol.

At the current rate of 22.5 per cent on diesel, the state gets Rs 16.79 per litre as tax and the tax will decrease to Rs 13.43 per litre if the VAT rate comes down to 18 per cent.

On the other hand, the government gets Rs 21.15 tax per litre of petrol at the current VAT rate of 36.5 per cent and it will reduce to Rs 19.24 per litre if the VAT rate is reduced to 32 per cent.

The notification also invited objection, suggestions and comments on the decision of the state government while informing the public to submit their response to the commissioner (taxation) within 14 days.

Meanwhile, a key member of All Manipur IOC Retail Outlet Dealers Association told The People's Chronicle that it is a good step on the part of the government to bring down the VAT rate to give some relief to the public on the price hike of petroleum products.

However, the reduced rate will still be higher than the neighbouring states and it will continue to affect the revenue collection of the state government.

The whole country is facing the impact of Covid-19 pandemic but states like Meghalaya, Assam and Nagaland are bringing down the VAT rate to give relief to their citizens.

As a result, vehicles carrying out inter-state services along the highways are buying fuel from other states which affected the sale volume as well as revenue collection from petroleum fuel in the state.

The state is experiencing around Rs 50 crore reduction in revenue collection from the sale of petrol and diesel.

Though the government is taking up steps to bring down diesel price by Rs 3.36, it is still higher than those in other states and it might not bring any significant improvement in sales volume.

The government needs to bring down the price at par with the neighbouring states or below their rate in order to increase sales volume.

The situation is also same with petrol, he said.

Meghalaya in February reduced VAT rate from 31.62 to 20 per cent for petrol and from 22.59 per cent to 12 per cent for diesel.

As a result, one litre of petrol costs Rs 96.92 in Meghalaya against Rs 106.39 in.

Imphal and as such, the steps taken up by the government is not enough as compared to other states of the northeast.

One litre of diesel costs Rs 93.44 in Manipur, Rs 88.17 in Meghalaya and Rs 88.81 in Assam.

Even if the state government brings down diesel price by Rs 3.36 per litre, it will still cost Rs 90.07, which is higher than those in Assam and Meghalaya, he added.

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