the goan I network
PANAJI
In a bid to shore up the State’s finances which have for long been in the red, Chief Minister Pramod Sawant-led State government on Friday revised upwards the rates of Value Added Tax (VAT) on petrol by 5 percentage points which will hike the per-litre price of the fuel by almost Rs 2.70.
VAT on diesel was also hiked by 3 percentage points and it will now cost about Rs 1.40 dearer per litre. The price hike will take effect from Friday-Saturday midnight.
The move dilutes for the second time the 2012 move of then chief minister late Manohar Parrikar by which petrol was subsidized by up to Rs 10-11 per litre to keep a pre-poll promise. The VAT then was slashed by up to 18 percentage points from 28% to 10%. Earlier in 2017 soon after quitting as Defence Minister and taking over as Chief Minister of Goa, he had reversed his own 2012 decision and hiked VAT on petrol from 10 % to 15 %.
On Friday, the Sawant government has hiked the VAT on petrol to 20% and on diesel to 18%. The notification issued by Under Secretary (Finance) Sushma Kamat said VAT on motor spirit commonly known as petrol which was 15 per cent has been increased to 20 per cent. On diesel it has been increased from 15 per cent to 18 per cent, Kamat said in the notification, adding that it will come into force from Saturday (June 15).
Meanwhile the petrol dealers’ collective said with the notification revising VAT rates, cost of petrol will go up by approximately Rs 2.70 per litre.
As for diesel, it will be dearer by about Rs 1.40 per litre, Paresh Joshi of the All Goa Petrol Dealers’ Association said.
On Friday petrol was priced at 63.74 per litre and diesel Rs 63.04 per litre. After the price hike on Saturday, the fuels will still be cheaper by up to Rs 5 per litre in comparison to the cost in neighbouring Karnataka and Maharashtra.
At current levels of consumption, the State government is estimated to rake in an additional Rs 8-10 crore per month with the hike in VAT rates of petrol and diesel, thus replenishing the State exchequer by about Rs 100 crores in the balance three quarters of the current fiscal.
Parrikar had shot to national fame when he had introduced the move in 2012. Prime time debates had hailed him an economic wizard, at a time when soaring fuel prices was a hot political topic.
For Goa’s exchequer however, the move was crippling as the State lost a sizeable Rs 200-crore annually. What had further crippled Goa’s finances then was the sudden ban on mining imposed by the Supreme Court which further depleted by Rs 1000-odd crores which trickled in regularly as royalty on ore from the mining sector annually.
