NEW DELHI: AAP government in Delhi on Wednesday decided to increase the Value Added Tax (VAT) on petrol from 20% to 25% and on diesel from 12.5% to 16.6%.

As a result of increase in VAT, petrol prices in Delhi will rise by Rs 2.78 per litre while diesel will be costlier by Rs 1.83.

The bill to amend the VAT law in Delhi, thus enabling the AAP government to regulate tax rates on petroleum products, liquor and aerated drinks, had been passed by the assembly on June 30, amid a walkout by the opposition BJP.

Both BJP and Congress had protested against the AAP government's decision to amend the VAT law in Delhi.

Finance minister Manish Sisodia, however, had assured that the amendment in VAT Act will not led to increase in prices.

"The Delhi government claims to have a surplus budget. Then what is the logic of bringing a proposal to raise VAT (value-added tax)? It raises suspicion," BJP leader Satish Upadhyay said.

Delhi Congress had also accused the AAP government of "misguiding" the people on the issue of Value Added Tax (VAT).

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