Gujarat Deputy Chief Minister Nitin Patel on Thursday said the state government was considering hiking the Value Added Tax (VAT) on fuel to compensate for dip in the revenue due to lockdown. At present, the Gujarat government levies 21 per cent tax on the sale of petrol and diesel -- 17 per cent VAT and 4 per cent cess.
Patel said both VAT as well as fuel prices in Gujarat are lowest in the country. "We have lost significant revenue in the form of Goods and Services Tax collection because businesses were shut due to the lockdown. We also incurred additional expenditure in rolling out relief package for the people hit by the lockdown," he told reporters in Gandhinagar.
"Fuel prices in Gujarat are lowest in the country because our VAT is also the lowest. Some experts have suggested we increase the VAT, bringing it at par with other states. This will help us in fighting coronavirus as well as in meeting developmental expenditure," the deputy CM said. But no final decision had been taken yet, he added.