Octroi removed,petrol,diesel now cheaper

In a much-needed relief,the Punjab Cabinet on Monday approved to abolish octroi on petrol and diesel in Punjab,making the two petro products cheaper by Rs 2 and by Re 1 per litre respectively.

To offset the loss that various municipal bodies in the state would suffer owing to the populist move,the Cabinet also gave nod for the requisite amendments in the Punjab Municipal Act,1911,Punjab Municipal Corporation Act,1976 and Punjab Municipal Fund Act,2006. The state would issue required Ordinances in this regard immediately.

It may be recalled that the state had abolished octroi on all items except electricity,petrol and diesel with effect from September 1,2006. The octroi on petrol and diesel was adversely affecting the sales in those urban areas of the state,which are adjacent to other states,as the rates of these products in the neighbouring states is much less. Therefore,a need to abolish the octroi,which was charged at the rate of 1 per cent on petrol and 2 per cent on diesel was felt. Hence the amendment to the Punjab Municipal Act,1911 has been proposed.

The state would compensate the department of local government by increasing the share of local bodies in the value added tax (VAT) from the current 10 per cent to 11 per cent,to offset the revenue loss.

In another significant move,the Cabinet also decided to remove the condition on the panchayat retaining 50 per cent of the cultivable land available with it after sale,gift or exchange as provided under Section 5 of the Punjab Village Common Lands (Regulation) Act,1961.

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