By IANS
Ranchi : The Jharkhand government will reduce Value Added Tax (VAT) by two percent on diesel from April 1.
Finance Minister Stephen Marandi said here Thursday: “We have reduced the VAT on diesel from existing 20 percent to 18 percent. The reduction of VAT will have impact on the state coffers. According to an estimate, the state government will lose Rs.46 crore (Rs.460 million) per annum by reducing VAT.”
He said: “Due to existing VAT structure, the sale of diesel slipped up to 15 percent in the state. We hope that the reduction of VAT will help the petroleum dealers to sell more diesel.”
The petroleum dealers were demanding reduction of VAT on diesel for a long time.
They claimed that the sale of diesel had gone down by up to 30 percent in the state causing huge loss to the state coffers. The government survey, however, revealed that the diesel sale gone down by 15 percent due to the existing VAT rate.
The Jharkhand government has also extended the VAT exemption period of essential commodities in the state for one year. When VAT was implemented, the state government exempted essential products including rice, vegetables and flour.
The exemption period was expiring March 31, 2008 but now has been extended by one more year.