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AP not inclined to cut VAT on fuels
Amaravati The Andhra Pradesh government is not inclined to cut Value Added Tax (VAT) on petrol and diesel due to its precarious financial condition, a top official said here on Friday
Amaravati The Andhra Pradesh government is not inclined to cut Value Added Tax (VAT) on petrol and diesel due to its precarious financial condition, a top official said here on Friday.
Two days ago, the Centre reduced the Excise Duty on petrol and diesel by ₹5 and ₹10 a litre, respectively and asked the states to cut VAT to give more relief to consumers.
Consequently, petrol price fell to about ₹110 a litre and that of diesel to about ₹97.
Many states have followed the Centre’s advise and reduced VAT.
“We have not taken any decision on the issue yet, but it is highly unlikely that we will affect any reduction in VAT. Our precarious financial condition does not permit it,” said the official.
On July 20 last year, the state government revised the tax structure on petrol and diesel, thereby increasing their price by ₹1.24 and ₹0.93 per litre, respectively, to mop up an additional revenue of about ₹600 crore per annum.
Subsequently, a road development cess of ₹1 per litre each on petrol and diesel was levied for an additional revenue generation of ₹600 crore.
The government is now seeking to escrow the road development cess revenue to secure over ₹2,000 crore loan from banks, while money has reportedly not been spent on road development works so far.
“Forget about development, not a km length of road has been repaired in the state in the last two years,” Jana Sena Party Political Affairs Committee Chairman Nadendla Manohar alleged.
He wondered what happened to the hundreds of crores of Rupees collected by the government in the name of road development cess, besides additional taxes on fuel.
He regretted that people were forced to bear the additional financial burden in the name of cess and VAT, “despite there being no development.” “The Jagan Mohan Reddy government should tell the people to what extent it will reduce VAT on petrol and diesel, like the other states. Otherwise, we will expose the government,” Manohar warned in a statement.
AP Congress Committee president S Sailajanath too demanded that the state government immediately reduce VAT on petrol and diesel and mitigate the burden on people.
“We will take up an agitation if the government fails to follow other states and reduce VAT,” he said.
