In a notification issued on October 1, Punjab Excise and Taxation department has increased VAT rate on diesel (other than premium diesel), cold drinks (including aerated drinks, soda) and Cigarette and Cigar by 1 per cent, 5 per cent and 9.5 per cent respectively.
With this hike, the tax on diesel has increased to 9.75 per cent while VAT on cold drinks and cigarette have jumped to 27.5 per cent and 30 per cent.
Punjab also levies 10 per cent surcharge on VAT rates.
After levying surcharge, the effective tax rates on diesel, beverages, cigarette will be 10.72 per cent, 30.25 per cent and 33 per cent respectively, said an official of Punjab Excise and Taxation department.
After the hike in VAT on diesel, the retail price of diesel has jumped by 55 paise a litre to Rs 58.11 per litre.
Punjab annually collects about Rs 2,600 crore of tax from petroleum products.
Meanwhile, opposition party Punjab Congress today described hike in tax on diesel as “black Diwali gift” for people and demanded its immediate roll back.
In a statement here, Punjab Congress President Partap Singh Bajwa said by effecting the hike in VAT, Chief Minister Parkash Singh Badal, had given “Black Diwali gift” to the people in general, industry and the farmers in particular.
Pointing out that VAT on diesel in Punjab was the highest amongst several states including neighbouring Haryana, Bajwa said Punjab Chief Minister had claimed himself to be the biggest champion of the farmers as it was this section which would suffer the most from this decision in view of the fact that the farm sector in Punjab was known to be the main consumer of diesel.
Taking a dig, PPCC chief said it was Badal who had been attacking the UPA for every hike in the prices of diesel and petroleum on the logic that such decisions were anti-people and add to all round inflation.
“Badal owes an explanation to the people as to why VAT has been increased by one per cent in the state in which it is already being charged at the rate of 8.75 per cent. You can’t have double standards on every issue”, he added.