Fuel becomes costlier in Andhra Pradesh after the state government decided to increase value added tax (VAT). After the hike, petrol is now costlier by Rs 1.24 a litre and diesel by Rs 0.93 a litre in the state.
After a slip in income due to the coronavirus outbreak and the subsequent lockdowns, the VAT hike will help the Andhra Pradesh government mop up additional annual revenue of Rs 600 crore.
On Monday, the state government issued an order yesterday amending provisions of the Andhra Pradesh Value Added Tax Act, 2005. Petrol will be taxed at 31 percent along with an additional levy of Rs 4 while diesel will be taxed at 22.25 percent plus Rs 4 per litre.
In April 2020, the state's own revenues fell to Rs 1,323 crore when compared to Rs 4,480 crore in the same month a year ago, just 29.5 percent of the total expected revenue.
Similar trends were observed in May and June as well, Special Chief Secretary (Revenue) Rajat Bhargava said in the order.
Subsequently, the government after due consideration decided to revert to the earlier tax regime prevailing between 2015 and 2018.
Several other states, including Delhi, have hiked local taxes on fuel to increase revenue.
Additionally, the central government had increased the excise duty on per litre of petrol by Rs 10 and per litre of diesel by Rs 13 in May.