AAP GOVT MAY IMPOSE 5% VAT ON CNG

The Arvind Kejriwal Government is in the process of introducing five per cent Value Added Tax (VAT) on

Compressed Natural Gas (CNG) in the national Capital. Presently, CNG is exempted from VAT in Delhi. If

the proposal is accepted, the price of CNG will go up by Rs 1.86 paise per kg from Rs 37.20 to Rs 39.06

per kg. Last time CNG price was hiked by the Indraprastha Gas Limited (IGL) in October last year. The IGL

had fixed Rs 37.20 per Kg CNG for Delhi.

The erstwhile Sheila Dikshit Government had tried to impose five per cent VAT on CNG in 2012 but had

to retract the proposal after a political furore. The AAP Government’s move is also likely to create a

political furore as all the public transport vehicles — including buses, cars and autorickshaws — run on

CNG and hike in its prices will increase the cost of travel. This would also impact on over eight lakh

vehicles running on CNG.

Top sources told The Pioneer that the Delhi Government is in the process of introducing five per cent

VAT on CNG. The proposal is expected to be part of annual Budget of the Delhi Government that would

be tabled on March 28 in Delhi Vidhan Sabha.

Sources said that the imposition of the VAT on CNG is likely to add Rs 156 crore every year to the State

exchequer. The total sell of CNG is estimated around 23 lakh kg per day. Estimates show that the city

Government will get Rs 42.78 lakh every day from VAT on CNG.

The cash-strapped DTC, whose losses have doubled over the years, is going to be the major victim of the

new VAT regime. A senior officer said that the government may be forced to even increase the DTC fare.

The DTC has not revised its fares during the past five years.

There are over eight lakh vehicles run by CNG in Delhi that include 6,500 buses, 90,000 autorickshaws,

50,000 local taxis and 5,000 light good vehicles.

NGS INDIA