Haryana slashes VAT on LPG, diesel

June 6th, 2008 - 7:22 pm ICT by IANS  

Chandigarh, June 6 (IANS) Haryana Friday became the first state in the country to waive off value added tax (VAT) on liquefied petroleum gas (LPG) and reduced it for diesel to soften the hike in prices of both commodities announced by the central government two days back. With the waiver announced by the Bhupinder Singh Hooda government, LPG will be cheaper in the state by Rs.13 while diesel will be cheaper by Rs.1.

The state government waived off the entire four percent VAT on LPG while on diesel VAT has been reduced from 12 to 8.8 percent.

The concessions will be effective from Friday.

The central government Wednesday announced a hike of Rs.50 per LPG cylinder, Rs.3 per litre for diesel and Rs.5 per litre for petrol.

“This will make LPG and diesel the cheapest in the country. Petrol price in Haryana is already cheaper compared to other states,” Chief Minister Hooda told reporters here after an emergency cabinet meeting.

“We have extended a benefit of Rs 3.57 billion ($85 million) to the people in Haryana,” Hooda said.

There are nearly 3.15 million LPG consumers in the state and the VAT reduction will cost the state government around Rs.450 million annually.

The reduction in VAT on diesel will cost the state Rs.3.12 billion. The diesel rate in Haryana will now be Rs.33.66 per litre compared to Rs.34.66 after the announced hike.

In a major relief to passengers of state transport, Hooda announced that there was no proposal to increase bus fares in the state even after the fuel price hike.

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