Govt mulls tax on diesel cars to be paid at the time of purchase of vehicle

The standing committee on petroleum and natural gas in its report Challenges of Under-Recoveries of Petroleum Products has suggested levying a tax on private diesel car, which has to be paid at the time of purchase of diesel vehicle.

According to the report, such collections should go for compensating the under-recoveries of oil marketing firms. It added that there has been a rise in consumption of subsidised diesel by private car owners.

Currently, there is a subsidy of Rs 10.83 on sale of each litre of diesel. After the deregulation of petrol, the price difference between diesel and petrol has increased more than Rs 20 which has forced many buyers to opt for diesel cars . However, minister of heavy industries Praful Patel has strongly opposed the move and said that this is not fair for auto industries.

In the last one year the sale of diesel cars has increased substantially. According to Mayank Prateek, marketing head, Maruti Suzuki India Ltd (MSIL), "Diesel can account for 75 to 80 per cent of the total sales of models in which diesel variants are available. Earlier, the percentage was limited between 25 and 30 per cent."

Courtesy: Mail Today