The Himachal Pradesh Assembly passed the amendment to the Value Added Tax (VAT) Act, enabling the government to levy a cess up to Rs 5 per litre on petrol and diesel to fund welfare schemes for orphans and widows. The move triggered a heated debate between the treasury benches and the Opposition.
Chief Minister Sukhvinder Singh Sukhu defended the decision, saying the cess would be used for social welfare and that the government has only fixed an upper limit. “We can impose even 5 or 10 paise within this cap. The intention is to ensure that orphans and widows do not feel helpless and lead a dignified life,” he said.
Sukhu also accused the Centre of imposing higher taxes than the state government. “Why is the BJP opposing a welfare measure for Himachal?” he asked, adding that the state would ensure fuel prices remain competitive with neighbouring Punjab and Haryana.
The Opposition, however, strongly opposed the Bill, calling it anti-people. BJP leader Randhir Sharma argued that fuel in the state is already heavily taxed, with around 17.5 per cent VAT on petrol and 13.9 per cent on diesel. “The cess will push the cost of petrol over Rs 100 and diesel around Rs 90 and put a massive burden on the common man,” he said.
Sharma also questioned the logic of funding welfare schemes through fuel taxation. “The same sections you want to benefit will end up paying more due to rising prices of essential goods,” he added, warning that higher fuel prices would increase the cost of ration, vegetables and milk. He further said that border areas could see a drop in fuel sales as consumers will shift to neighbouring states like Punjab, Haryana, and Chandigarh where prices would be lower.
Trilok Jamwal, the BJP MLA from Bilaspur, said the move could make fuel rates the highest in North India. He highlighted the potential impact on transporters, particularly in Bilaspur, which has a large truck operators’ base. “Commercial vehicles may prefer refuelling outside the state, leading to revenue losses instead of gains,” he said.
Former BJP state president Satpal Satti warned that petrol stations in border areas would suffer heavy losses. He also said collecting money in the name of widows could be seen as insensitive, adding that increased fuel costs would push up freight charges and ticket fares.
Leader of Opposition Jai Ram Thakur criticised the government’s approach, saying, “If the financial health of the state is weak, burdening people in the name of welfare is not the solution.” He cautioned that global factors, including tensions in the West Asia, could further drive up fuel prices, compounding the impact of the cess.
Responding to the criticism, Sukhu said the Opposition should instead press the Centre to reduce central taxes and cess, claiming that a significant portion of fuel pricing comes from union taxes. Despite the Opposition’s objections and demands to withdraw the proposal, the Bill was passed, paving the way for implementing the cess.