19th April, 2012
Sh. K.K.Sharma, IAS
Adviser to Administrator
Subject: Request for followng GOA pattern and slash VAT rates on petrol from
20% to 5% in Chandigarh, provide relief to common public.
view of the fourth original principal of the Citizen Charter, I would
like to submit, that the State of GOA has recently reduced the VAT on
petrol to 0.1% which has reduced the petrol prices by 11 rupees, which
is a big relief for the inflation crushed public. This has also recorded
an average daily sale of petrol worth Rs. 3.5 crore per day, in the
tourist state. The impact has already taken place wef 2nd of
April, 2012. The reduction has resulted in heavy sales at fuel stations
in the tourist state of GOA. Accordingly it is requested that the rate
of VAT be reduced to 5% on the petrol, which will provide relief of
about Rs. 8/- per litre on petrol. This will also raise the sales as the
tourists and transit visitors will prefer to buy fuel from here.
officials said Goa recorded an average daily sale of petrol worth Rs
2.3 crore before the new rate came into effect. Now the sales have
touched Rs 3.5 crore mark a day.
budget of Chandigarh is hardly spent on time and is virtually consumed
at the end of the financial year, that too with the instructions of the
Chandigarh Administration. This also shows that there is no dearth of
is further submitted that as per Constitution of India the main purpose
of taxation is to accumulate funds for the functioning of the
government machineries. No government in the world can run its
administrative office without funds and it has no such system
incorporated in itself to generate profit from its functioning. However
in the case of Chandigarh the funds are always in abundance and there
are many departments whose budget has been lapsing in the past and as
such the position is that Chandigarh, being one of the costliest cities,
doesn’t need high taxes.
the recent petrol hikes, it has been observed that in Chandigarh the
rate of VAT on petrol is 20% whereas as per the basic VAT law the tax is
0% for essential commodities, 1% on bullion and valuable stones, 4%
(now 5%) on industrial inputs and capital goods of mass consumption and
rest of the items are taxable @ 12.5%. However in case of tobacco,
liquor and petrol the rate of tax is over 20%. The higher rate of tax is
understandable in case of tobacco and liquor but there is no basis for
keeping the tax so high in the case of petrol.
neighbouring states may raise a hue and cry but that should be no
consideration, such as UT has made no objection to the rate of 5% VAT on
eatables in Himachal Pradesh, as the same is 12.5% in Chandigarh.
Moreover the neighbouring states are having exemption and deferrment
policies in VAT whereas there is no such policy in chandigarh.
keeping in view the frequent hikes in the prices of petroleum and
availability of funds with Chandigarh Administration it is requested
that the rate of VAT be brought down to 5%, in order to provide the much
needed relief to the common man crushed by recurring hikes in
petroleum. Moreover, as per Constitution of India the taxes are not
required to make profits but only for functioning. Accordingly the rate
of VAT is brought down to 5% from 20%, to provide the much needed relief
to the public.
AJAY JAGGA, Advocate