Himachal imposes widow, orphan cess on fuel; what it means
What's the story
The Himachal Pradesh government has introduced a new tax, the Widow and Orphan Cess, on petrol and high-speed diesel. The cess, which is 60 paise per liter on petrol and high-speed diesel, came into effect from midnight on August 11. The state government said the revenue generated will be used for welfare programs for widows and orphaned children.
Legal framework
Cess applicable at 1st point of sale in state
The State Taxes and Excise Department issued a notification under Section 6-A of the Himachal Pradesh Value Added Tax Act, 2005.
The cess is applicable at the first point of sale of petrol and high-speed diesel in the state.
The move comes after the Himachal Pradesh Legislative Assembly passed the Value Added Tax (Amendment) Bill, 2026.
Welfare focus
Bill allows cess of up to ₹5 per liter
The Bill allows the state government to impose a cess of up to ₹5 per liter on petrol and high-speed diesel.
This means that the current 60-paise charge may not be the final rate and could be increased later.
Chief Minister Sukhvinder Singh Sukhu had defended the decision, saying it was aimed at strengthening economically weaker sections.
He said, "If we are taking steps for the welfare of widows and orphaned children, the opposition should support it instead of opposing."
Criticism voiced
Opposition, petroleum dealers criticize government
However, the move has faced criticism from opposition parties. Leader of Opposition Jai Ram Thakur had said it was wrong to raise revenue "in the name of widows and orphans."
The association of petroleum dealers also called the move "unjustified," fearing it would lead to people buying fuel from neighboring states due to increased prices.
This would make Himachal lose more revenue than it earns from the cess.
Financial strain
State would earn over ₹1,000 crore a year
The cess is part of a larger tax increase, which has already raised diesel prices by ₹15.40 through taxes and VAT combined.
BJP MP Anurag Thakur said the state would earn over ₹1,000 crore a year from these hikes.
Himachal Pradesh is facing financial challenges with debts exceeding ₹1 lakh crore and delayed salaries for government employees.