AMIT BAJAJ ADVOCATE

Petrol prices in Punjab are highest in India. People in Punjab wonder why they have to pay for petrol much higher than the neighbouring states. The reason for it is the higher VAT rates on Petrol in Punjab as compared to neighbouring states, infact much more than any other state in India.

In Punjab VAT  on Petrol is charged @ 27.5 per cent and surcharge on the VAT is 10 per cent which makes total VAT on petrol @ 30.25 per cent.
To add on that Re. 1per litre infrastructure development cess and 1.5 percent octroi is also levied on petrol. As a result total taxes charged by Punjab on petrol is equivalent to 32.75 per cent making it highest in country.

See the difference in rates of taxes on petrol in Punjab and in neighbouring states

Thus in Punjab rate of taxes on Petrol is much more higher than the neighbouring states. Such higher rate of tax cannot help in increase of the revenue of the Government but instead it effects the sales of petrol in Punjab as the difference in petrol prices between Punjab and neighbouring states is huge, consequently it effects the revenue of the Punjab Government itself.

Punjab Government should consider decrease in VAT rate making it almost equivalent to the rates as existing in the neighbouring states as it will balance out the sales in Punjab and other states and will not effect the revenue of Punjab as the sale of petrol in Punjab will increase. It will also give relief to common man.