Goa hikes VAT on petrol by 7 percent

Panaji, March 16 (IANS) Four years after virtually abolishing VAT on petrol as part of a poll promise, the Goa government on Wednesday announced a seven percent hike in value added tax (VAT) on the popular fuel.

The step pushed taxation levels on petrol to pre-2012 level.

With Chief Minister Laxmikant Parsekar announcing in his budget speech that VAT on petrol will be 22 percent as compared to 20 percent in 2012, the Congress said the VAT hike was a classic case of the ruling Bharatiya Janata Party making a U-turn on its poll promise of abolishing the tax on the popular fuel.

"In order to cater to the enhanced spending on infrastructure projects, as well as, social welfare schemes; I propose to increase the VAT on motor spirit from 15 percent to 22 percent," Parsekar said.

He said even with the seven percent increase in VAT, petrol would not cost as much as it did in 2012, before then chief minister Manohar Parrikar virtually had abolished VAT on petrol bringing prices down by Rs.11. It had made petrol price in Goa the cheapest in the country.

Petrol is currently priced at Rs.51.05 in Goa, the proposed increase in VAT is expected to raise the price by around three rupees.

Justifying the hike in VAT, Parsekar said in 2012, the petrol price, which had soared to Rs.72 per litre in Goa, was the reason why the VAT was nearly abolished in the first place.

"My government had reduced VAT on petrol, in the year 2012, to provide succour to the general public due to the increasing cost of this important fuel, used by daily commuters in the state. The price of petrol was Rs. 72 per litre, which was brought down to Rs.61," Parsekar said.

In his last budgetary exercise ahead of the 2017 state assembly elections, Parsekar had presented a revenue surplus budget of Rs.158.82 crore for 2016-17.

While the revenue receipt for the current fiscal are estimated at Rs. 10641.96 crore, the revenue expenditure is estimated at Rs. 10483.14 crore.

The Opposition party, Congress, described the VAT hike on petrol a predictable rollback of a poll promise. "This was avoidable. But this government has made a habit of taking U-turns on their decisions," Leader of Opposition Pratapsing Rane said.