Monday 10 December 2018

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Economy | Budget

Petrol up nationally; will Parsekar rollback the budget-hike of VAT on petrol?

 

Will Chief Minister Laxmikant Parsekar rollback the 7% hike of the Valued Added Tax on petrol, even before his budgetary announcement comes into effect?

Because, while he was announcing the hike in the House today afternoon, at national level, petrol prices have gone up by Rs 3.07 per litre.

And Parsekar has made it amply clear that he will revise the additional VAT if petrol prices go up at national level, to maintain the actual price not beyond Rs 55 per litre in Goa.

By increasing the VAT from 15% to 22%, Parsekar said the petrol in Goa would cost Rs 54.08 per litre. Today it costs Rs 50.98 per litre.

However, with the hike at national level, the petrol would now cost Rs 57.17 per litre, almost Rs 2.15 per litre extra if Goa’s increased VAT is included in it.

Of course, while the national level hike comes into effect from midnight, the state government hike would be effective from 1 April.

If petrol price does not come down in a next fortnight, a finance department official told goanews.com that the government will have no other alternative but to reduce the VAT to 18%, meaning 4% less than the hike announced today.

While presenting a surplus budget of Rs 158 crore, Parsekar had considered major amount of revenue from the increased VAT on petrol – approximately Rs 80 crore, which is almost half of the surplus amount.

 

However, the national hike would cost Goa at least for Rs 35 crore, reducing its surplus to Rs 123 crore, even before the resource mobilisation begins.

8 HIKES IN 4 YEARS!

While taking reins of power in 2012, former chief minister Manohar Parrikar had reduced VAT on petrol to 0.1% - almost nil – in order to fulfil his election promise.

This reduction had made him even nationally popular while Goan youth was jubilant with Parrikar’s decision.

However, since then, Parrikar went on increasing the VAT on petrol, giving reason that petrol prices have come down at national level.

Instead of passing on this benefit to the consumer, Parrikar had transferred it to the government kitty as the state was badly hit by financial crisis.

“Since then, this is the eighth time we are increasing the VAT. But we will maintain the price range of Rs 55 per litre”, Parsekar told the media after presenting the budget today.

Meanwhile, nationally, diesel has also gone up by Rs 1.90 per litre. 






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