The Commercial Taxes Department here issued a notification on Thursday to impose a special VAT (value-added tax) on petrol and diesel in the whole of the Union Territory. The notification issued by the Secretary to Finance Shurbir Singh pointed out that the tax would be effective from Friday and would remain in force for three months.
Although there was no specific reason for the imposition of the tax, there had been proposals by the administration to mop up revenue to the Exchequer. Already, special excise duty has been imposed on liquor in Puducherry and Karaikal regions. Now, VAT has been imposed at 28 percent on petrol while it was 21.8 percent on diesel in Puducherry and Karaikal regions.
The tax on petrol is 23.9 percent and 18.15 percent on diesel in the Mahe region, an enclave of Puducherry in Kerala. The VAT on petrol and diesel is 25.7 percent and 20 percent respectively in Yanam, an enclave of Puducherry in Andhra Pradesh, the notification said.