Jammu: Fuel prices in Jammu and Kashmir are set to witness an increase as the government has proposed a reduction in the rebate on petrol and diesel, alongside an increase in the tax rate on aviation turbine fuel.
The move is part of a broader strategy to rationalize fossil fuel taxation, encourage cleaner energy alternatives, and boost revenue generation.
“We need to explore every avenue for upscaling revenue generation while enhancing social protection for the poor. We need to ensure cost savings through austerity measures and efficiency measures. We must also improve the impact of public expenditure by leveraging scale, competition and private initiative,” Jammu and Kashmir Chief Minister Omar Abdullah said
“In this direction, we will undertake rationalization of tax on fossil fuels. While fossil fuels are presently essential to our development, the encouragement to their consumption needs to be gradually reduced to encourage shift towards use of cleaner technologies. The prices of these fossil fuels are lower in Jammu & Kashmir than neighbouring States, like Punjab, Haryana, Himachal Pradesh, and Delhi. Hence it is proposed to reduce rebate on Petrol by Rs. 1 per litre and on High-Speed Diesel (HSD) by Rs. 2 per litre and increase tax rate on aviation turbine fuel to 5%,” he added.
Moreover, to curb revenue losses and support local businesses, the Jammu and Kashmir government has announced a 12% road/token tax on all fresh non-transport vehicles purchased from outside the Union Territory (UT), provided they have an authorized dealership or sale point within J&K. Additionally, a 3% Green Cess will be levied over and above the existing tax rate for such vehicles.
The decision, part of the Jammu and Kashmir Budget 2025-26, aims to prevent revenue leakage and promote the local automobile industry, ensuring that vehicle purchases contribute to the UT’s economy rather than benefiting other states.
