Delhi Cabinet waived VAT on Increased Price of Diesel to provide 37 paise per litre Benefit

The Delhi Cabinet on 27 June 2011 decided to waive VAT on the increased price of diesel to provide 37 paise per litre benefit to consumers. The government also offered Rs.40 per cylinder subsidy on cooking gas to 4.50 lakh families under the Below Poverty Line and Antyodaya Anna Yojana (AAY) scheme.

Union Finance Minister Pranab Mukherjee's had requested all the State Governments to lower Value Added Tax on oil products to reduce the impact of the hike in diesel, LPG and kerosene prices announced by the Centre. Chief Minister Sheila Dikshit announced the marginal reduction in diesel price in Delhi and the subsidy on cooking gas for the poorest of the families in response to the finance minister’s plea.

Delhi currently levies 12.5 per cent VAT on diesel in comparison to neighbouring Haryana's 8.8 per cent.

Delhi Government would not levy any VAT on the increased price of diesel. So the price of diesel, which stood at Rs.37.75 prior to the hike, would only increase by Rs.3 to Rs.40.75. The 37 paise VAT which the Government had levied taking the selling price to Rs.41.12 was cancelled. Therefore diesel would sell at Rs.40.75 per litre.

The Chief Minister said the Cabinet has also decided to grant a substantial relief to BPL and AAY families in respect of LPG cylinders. The earlier price of LPG was Rs.345.35 per cylinder and after increase of Rs.50 the price of a LPG cylinder had gone up to Rs.395.35. The Delhi Government has decided to provide a subsidy of Rs.40 on every 14.2 kg LPG cylinder. This would benefit nearly 4.50 lakh BPL families and about 1 lakh AAY families in Delhi.

The Cabinet also decided to regularise the house sites under the 20 Point Programme by granting perpetual lease. The lease will be granted under three categories- original owner, sold houses and commercial properties. The house sites were allotted by the Government under 20 Point Programme during the tenure of Prime Minister Indira Gandhi. The decision to grant perpetual lease in respect of 20 Point Programme allotment will end uncertainty about the status of the allotted sites.

The Cabinet also recommended to the Lieutenant-Governor to prorogue the Budget Session of the Delhi Assembly which had commenced on 15 March 2011.