Andhra Pradesh not inclined to cut VAT on petrol, diesel

Amaravati: While many States have reduced VAT on petrol and diesel following the announcement of reduction of Rs 5 by the Centre, Andhra Pradesh government is not inclined to affect any cut in the value added tax on petrol and diesel. The government feels that its precarious financial condition does not allow such a cut. Consequent to the Centre's decision, petrol price fell to about Rs 110 a litre and that of diesel to about Rs 97 in Andhra Pradesh.

According to officials, the government has not taken any such decision and in all probability, it is not inclined to do so. On July 20 last year, the State Government revised the tax structure on petrol and diesel, thereby increasing their price by Rs 1.24 and Rs 0.93 per litre respectively, to mop up an additional revenue of about Rs 600 crore per annum.

Subsequently, a road development cess of Rs 1 per litre each on petrol and diesel was levied for an additional revenue generation of Rs 600 crore. The government is now seeking to escrow the road development cess revenue to secure over Rs 2,000 crore loan from banks.