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The Delhi Cabinet on Wednesday decided to roll back the tax on diesel from 20 per cent to 12.5 per cent.
This decision was taken at a Cabinet meeting chaired by Chief Minister Shiela Dikshit in New Delhi.
The roll back was announced in view of the loss in sale of fuel in the capital due to lower tax rate in the neighbouring state, she said.
On LPG, she said Delhi government would propose to the Empowered Committee on VAT that it be considered a natural fuel and be kept out of the VAT net.