CITY RESIDENTS should brace themselves to dig deeper into their pockets to buy motor vehicles as the Chandigarh Administration is planning to increase value added tax (VAT) on motor vehicles to bring it on a par with Punjab.

At present, the city residents are paying 12.5% VAT while in Punjab VAT on motor vehicles is 13.2%. The proposal has been moved by the finance department and is under consideration of UT Adviser Vijay Kumar Dev.

UT Secretary (Finance) Sarvjit Singh confirmed that a proposal of hike in VAT on motor vehicles has been moved. He stated that there was need to bring parity in the rate of VAT as it will help in putting a check on malpractices.

B S Saluja, president of the Chandigarh Car Dealers Association, said that the move would neither improve nor affect sale of cars in the city. “It will only put additional burden on the consumers,” he said.
Recently, the administration had also mooted a proposal for increasing VAT on petrol to bring it on a par with Punjab and Haryana. The administration acted after a meeting of excise departments of UT, Haryana and Punjab was held to deliberate upon bringing parity in VAT on petrol.

At present, Chandigarh has the lowest VAT of 20% on petrol while Punjab and Haryana charge 32% and 26%, respectively.

In July this year, the administration had enhanced VAT on diesel from 9.68 % to 16.41%. In 2014, local Member of Parliament Kirron Kher had managed to get VAT on diesel reduced from 12.5% to 9.68%.
‘Reduce VAT on shoes, stationery and wood’

The traders of city have asked the administration to reduce VAT on shoes, stationery and wood to bring it on a par with Punjab. A delegation of Chandigarh Beopar Mandal (CBM) met the UT Adviser to discuss the issue. “When the administration is increasing VAT in city on certain items to bring it on a par with Punjab, it should also reduce VAT on items which is higher in Chandigarh as compared to Punjab,” said Kamaljit Singh Panchhi, advisor, CBM.