Dikshit cuts petrol price, calls Delhi budget 'people friendly'

New Delhi: Petrol, hairpins, kites, sacred threads and crayons will cost less in Delhi but CNG, beedis, sarees above Rs 1,000, and UPS will burn your pocket under new tax proposals in Delhi government's budget.

The government has decided to forgo Rs 1.26 on petrol, which was the VAT on a hike of Rs 6.28, this was announced in the budget today. Petrol will now cost Rs 71.92 after the cut, a relief of Rs 1.26 from Rs 73.18.

 Dikshit cuts petrol price, calls Delhi budget people friendly

Sheila Dikshit. Reuters

"The price of petrol in Delhi is the lowest among all the metro cities and lower compared to the price in neighbouring cities of Haryana, Uttar Pradesh also. I have deeply considered the matter and of the view that the citizens of
Delhi need to be provided some relief," she said.

However, the CNG price will see an increase from Rs 35.45 per kg following the five per cent hike in VAT.

Defending the introduction of VAT for CNG, Dikshit said, "we have continously forgone VAT on CNG...it is relevant to mention that UP and Haryana are already levying 12.5 percent and five per cent VAT respectively."

Other than petrol, what all will cost less in Delhi from now?   Hairpins, hairclips, safety pins, saree falls, kirpans, sacred threads, tricycles, kites, geometry boxes, crayons and pencil sharpners are some of the articles which will cost less in the capital as Delhi government proposed a exemption from
VAT.

"For the welfare of kids,  I propose to exempt VAT on tricycles and kites. In addition, for the school going children geometry boxes, colour boxes, crayons and pencil sharpeners, presently taxable at 5 per cent, shall also be
exempted," she said.

Other articles which get VAT exemption or slashing of rates include blood filters.

In a bid to discourage consumption of tobacco and tobacco products, which is one of the major causes of many dangerous diseases, Dikshit said, she intended to increase VAT on unmanufactured tobacco, bidis and tobacco used in manufacture of bidis and hooka tobacco to 20 percent from 12.5 per cent.

Noting that her government did not levy VAT on textiles, barring a few exceptions last year, she said it is now unsustainable.

"At the same time, I do not propose to place any burden on the weaker sections of society. I, therefore, intend to exempt all kinds of textiles costing up to Rs 300 per meter; piece or set costing up to Rs 600, and sarees up to Rs 1,000.

"All textiles above these limits shall be taxed at five percent. However, khadi will continue to remain exempted," she said.

Coming down heavily on use of plastic, Dikshit proposed to increase VAT on plastic cups and glasses from the existing 5 percent to 12.5 percent.

"We respect religious sentiments of all citizens. I have noticed that there are certain commodities which are generally a part of our religious ceremonies and festivals and which are taxable at five per cent. These include roli, kirpan, prasadum by religious institutions, sacred thread and misri, patasha as part of prasad. I propose to exempt all from the levy of VAT," she said.

Buying UPS system will cost more in the capital as its VAT has been increased from five per cent to 12.5 per cent.

The increase in VAT came as government found out that some traders were evading VAT on the sale of inverters, which are taxable in Delhi at 12.5 percent, by reflecting the same to be sales of UPS systems in their sales invoice.

"It would not be out of context to mention here that most of the components/parts used in manufacturing of inverters and UPS systems are identical. Therefore, to bring uniformity and clarity, I propose to levy VAT on UPS systems and their parts at 12.5 percent," she said.

VAT on plastic, rubber and rexene footwear having MRP less than Rs 500 per pair has been exempted and Dikshit believes that this will give some relief to the "aam- admi".

PTI

Updated Date: May 28, 2012 20:20:46 IST