Chandigarh, July 17: A day after Punjab and Haryana hiked VAT on diesel, UT Chandigarh Administration on Friday also followed their footsteps and notified the increase in tax on the same, which will cause a hike of Rs 2.80 per litre in diesel price.
Chandigarh Administration today raised the Value Added Tax (VAT) on diesel from 9.68 per cent to 16.40 per cent.
The new tax rate will be effective from midnight tonight. "VAT on diesel has been raised as the UT Administrator has given his nod for raising the tax," an official of UT Chandigarh Administration department said here today.
With this hike, the retail rate of diesel will be Rs 50.40 per litre as against current rate of Rs 47.60 a litre, an increase of Rs 2.80 per litre. Diesel in Punjab (Mohali) and Haryana (Panchkula) now stands at Rs 50.41 a litre and Rs 50.10 per litre respectively.
Punjab and Haryana yesterday raised taxes on diesel to 17.29 per cent and 17.22 per cent respectively.
The whole exercise of raising VAT is in the wake of decision taken by northern states -- New Delhi, Punjab, Haryana, Himachal Pradesh and UT Chandigarh -- to rationalise present tax regime by implementing a uniform tax structure (UTS) in these states view to eliminate evasion of taxes and curb smuggling of goods through state borders.
Notably, Punjab Deputy Chief Minister Sukhbir Singh Badal had even held a meeting with Governor Punjab, Haryana and UT Administrator Kaptan Singh Solanki and discussed with him the issue of uniformity in taxes in Punjab, Haryana and Union Territory Chandigarh to prevent smuggling of goods and safeguard state's revenue leakage.
The monthly sale of diesel in UT Chandigarh is pegged at 13,000 kilo litres per month. Meanwhile, Chandigarh Petroleum Dealers Association expressed disappointment with the hike in tax rates, saying it will have hit the common man.
"The burden of hike in tax will ultimately be passed on to consumers. It is the consumers who will be the sufferers as they will now be forced to pay more. Moreover, it will also lead to inflation," said Association, General Secretary, Manpreet Singh.