PANJIM: The BJP’s flagship election promise of abolition of VAT on petrol, implemented by former Chief Minister Manohar Parrikar, is on the verge of being punctured in the run up to the New Year, with Chief Minister Laxmikant Parsekar deciding to impose VAT, to ease financial woes of the State.
Chief Minister Laxmikant Parsekar said that the government will impose five per cent VAT on petrol, pushing petrol price higher than that of diesel. “We have noticed the cost of petrol is lesser than diesel in Goa. This is not fair. The government will impose five per cent VAT on petrol so that its price will become a little more than diesel,” he told reporters on the sidelines of launching the toll free helpline for senior citizens.
The petrol prices in Goa had been slashed by Rs 11 after the BJP-led government under then Chief Minister Manohar Parrikar (now defence minister) virtually abolished VAT component reducing it to 0.1 per cent in March 2012. Petrol, which earlier cost Rs 65.86 had been slashed to about Rs 55, making it the cheapest in the country.
The chief minister also dismissed the possibility of criticism, which may arise from certain sections of society over rolling back Parrikar’s decision.
“We had abolished VAT, because petrol prices were rising and it was anti inflationary measure. People had hailed the decision but if you look at the current situation, petrol prices are reducing and inflation is under control. My decision is in the larger interest of the State and I know people will understand it,” Parsekar said.
With the implementation of VAT, petrol price per litre will increase to Rs 55-56, which at present is Rs 53. Parsekar said the price will be on par with diesel price of Rs 55 explaining the trend in the country wherein petrol is more expensive than diesel.
“We are facing a financial crunch due to mining closure which deprived us of 25 per cent of the revenue, and to a certain extent because of VAT abolition. The government worked out additional resource mobilisation to compensate for the loss. But if we get revenue from the increased petrol VAT, then it will bring in an additional Rs 70-75 crore to the State treasury,” Parsekar added justifying the proposed petrol price hike. Parsekar was quick to add that the implementation would be after Christmas celebration and by taking into confidence the stakeholders.
We had abolished VAT because petrol prices were rising. Petrol prices are now reducing and inflation is under control. My decision is in the larger interest of the State.
– CM Laxmikant Parsekar
