Goa imposes 5% VAT on petrol to match diesel prices

Reneging on a major poll promise made in its manifesto, the BJP-led government today announced that the decision to abolish Value Added Tax on petrol after coming to power in Goa, would now be reversed. “We will implement five per cent value added tax (VAT) on petrol. We have noticed that the cost of petrol is lesser than diesel in Goa, which is not fair. The state government will impose five per cent VAT on petrol so that its price is little more than diesel,” Chief Minister Laxmikant Parsekar told PTI today on sidelines of launching police helpline for senior citizens. He said that petrol prices would be matched with diesel.  "At present, petrol prices in Goa are the lowest. Petrol per litre is costing Rs 53 and diesel Rs 55. The imposition of VAT will hike petrol prices to Rs 55-56 per litre" Parsekar said. BJP led government after assuming power in the state in 2012 had abolished VAT on petrol as an anti-inflation measure reducing the prices on fuel by almost Rs 11 per litre. The decision which was taken by then chief minister Manohar Parrikar was hailed across the country. “We had abolished VAT because petrol prices were rising and it was anti-inflation measure. The decision to abolish VAT was received well by people and the government was appreciated for it. But if you look at the current situation, petrol prices are reducing. Also inflation is under control, so there is no requirement to abolish VAT,” the Chief Minister said. “I am taking the decision in larger interest of the state and I know that the people will understand it,” he said, responding to a question. The CM said that the state treasury had suffered after abolition of VAT on petrol. “We also suffered set back in the form of mining closure which took away 25 percent of our revenue flow. The government worked out additional resource mobilisation to compensate for the loss. But if we get money from petrol VAT then it will also help the treasury,” he said. The VAT imposition is expected to bring in Rs 70-75 crore more to the coffers. PTI