Chandigarh, April 30- Haryana Government has accorded approval to partially restore the VAT rate on sale of Diesel and Petrol in view of the decrease in price of nearly Rs 15 per litre compared with their prices in October 2018.

A decision to this effect was taken in the Haryana Cabinet which met under the Chairmanship of Chief Minister, Mr. Manohar Lal here today. The increase in rate of tax would be Re.1 per litre in case of Petrol and Re. 1.1 per litre in case of Diesel.

It may be recalled that in October 2018, Haryana had reduced rate of VAT on diesel and petrol by Rs 2.50 per litre in view of the fact that the rate of diesel and petrol had gone as high as Rs 76.11 per litre and Rs 84.19 per litre respectively. Now, when the rate has come down by nearly Rs 15 per litre in case of both diesel and petrol, the State has decided to partly restore the VAT rate.

As the proposed amendments, the rate of tax will be restored to 25 percent (effective rate 26.25 percent including surcharge) on Petrol and 16.40 percent (effective rate 17.22 percent including surcharge) on Diesel, that is pre-October, 4, 2018 levels and fixed rate of tax per litre may be increased from Rs.8.15 (effective rate Rs. 8.56 including surcharge) per litre to Rs. 9.20 per litre (effective rate Rs.9.66 including surcharge) in case of Diesel and from Rs.14.25 (effective rate Rs. 14.96 including surcharge) per litre to Rs. 15.20 per litre (effective rate Rs. 15.96 including surcharge) in case of Petrol. It is also proposed that the condition of legal notice of 10 days may also be dispensed with as huge financial implications are involved.

As per proposed amendments, the ad valorem rate of 17.22 percent will trigger, when Retail Sale Price is more than Rs. 65.75 in case of Diesel and ad valorem rate of 26.25 percent will trigger, when Retail Sale Price (RSP) is more than Rs.76.76 in case of Petrol.

With the proposed increase, the State will be able to garner additional tax of Rs.49 crore per month from Diesel and Rs. 12 crore per month from Petrol making it approximately Rs. 61 crore per month, presuming that the present volume of sales will remain unaffected.