Government withdraws VAT on CNG

New Delhi, June 4 (IANS) Delhi Chief Minister Sheila Dikshit Monday announced a withdrawal of five percent value added tax (VAT) levied on CNG. As a result, the price of CNG in the capital will remain unchanged at Rs.35.45 a kg.

The withdrawal comes after protests from legislators from both the ruling Congress and the opposition to levy of five percent VAT on CNG.

"We consider the sentiment of people, and keeping in view their demands, we have decided to remove the VAT on Compressed Natural Gas (CNG)," Dikshit said.

Had the raise been implemented, the price of CNG would have become Rs.37.20 a kg but after Monday's announcement it shall remain unchanged at Rs.35.45 a kg.

The levying of five percent VAT was announced by the chief minister on May 28 while presenting the budget for Delhi. The CNG powers auto-rickshaws and buses and most taxis in the capital besides a large number of private vehicles.