The State cabinet today decided to increase the rate of tax on diesel to 50 paisa.
According to Chief Minister Conrad Sangma, a Rs 5 to 6 crore increase in the revenue annually is expected from this hike of diesel tax.
He also said that this hike in diesel tax was done looking at the overall revenue for the State since the price of diesel between Meghalaya and Assam as of now is quite high.
“There is a difference of Rs 6.23 in diesel between Guwahati and Khanapara,” he said.
Sangma said that there should be a difference in rate so that Meghalaya has an advantage in the rates between Guwahati market and Ri Bhoi – Khanapara market.
He however added that the State government would ensure that the hike does not cross the national average so that overall rate is maintained.
“Meghalaya as of now is maintaining one of the lowest rates of petrol and diesel in the country,” Sangma said.
Asked if this can lead to an increase in the cost of transportation of essential commodities, Sangma said that every decision will affect something or the other and that there is nothing to hide about it.
“We saw that there is clearly a huge scope of revenue for us, hence we are increasing it by 50 paisa right now, and we’ll see accordingly as we go along,” he added.
In another decision, the cabinet decided to streamline the overall collection of the Value Added Tax (VAT) in excise as well as petrol and diesel.
Sangma informed that there will be no change in the VAT rates and therefore there will be no impact on the consumers but the cabinet only changed the timing within which business houses should pay the VAT to the government.
“The timing has now been changed. In petrol pumps earlier they had a time of three months for reconciliation of the VAT but now it has been reduced to 30 days. So, within a month’s time, they have to reconcile and whatever VAT has been collected, they should deposit it to the government exchequer,” he said.
Sangma informed that roughly Rs 350 crore has been collected as VAT on petrol and diesel.