Andhra Pradesh government hikes tax on petrol, diesel to mop up revenue

Citing resource crunch, the Andhra Pradesh government on Monday revised the tax structure on petrol and diesel, thereby increasing their prices by Rs 1.24 and Rs 0.93 per litre respectively to mop up an additional revenue of about Rs 600 crore per annum.

As per the new structure, issued vide a Government Order amending the provisions of Andhra Pradesh Value Added Tax Act, 2005, the revised rates for petrol and diesel will be 31 per cent (tax) plus Rs 4 (additional levy) and 22.25 per cent plus Rs 4 per litre respectively.

The states own resources have totally dried up because of reduction in revenues on account of the (Covid-19-imposed) lockdown. In April 2020, the state's own revenues realised were only Rs 1,323 crore as against Rs 4,480 crore in April 2019, which was just 29.5 per cent 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.

Under these circumstances and in order to overcome the financial crisis, the government after due consideration decided to revert to the earlier tax regime prevailing between 2015 and 2018.

We are also ensuring that the overall rates do not exceed those prevailing between 2015 and 2018. Several states are facing a similar situation and they too made upward revision of taxes to offset the loss of revenue, Rajat Bhargava said.

(Photo Credit: PTI)