Andhra Pradesh not to slash VAT on petrol, diesel

VIJAYAWADA: The state government does not seem to be in a mood to slash VAT on petrol and diesel and is putting responsibility on the Centre. The YSR Congress government started counterattack against the BJP led Central government for amassing a wealth of Rs 3.35 lakh crore by increasing surcharges and additional cess in the last two years and sharing just 5.8 per cent with the state as against 41 per cent of the total revenues pooled up from the increase in the fuel surcharges and taxes.

The Jagan Mohan Reddy government stated that although the Central government had collected Rs 3,35,000 crore as Central excise tax on petrol and diesel, it distributed only Rs 19,475 crore as AP’s share which was only 5.80 per cent of the total. The government claimed that the Centre should distribute 41 per cent of taxes collected by it to the states.

Finance minister Buggana Rajendranath said the state government never increased taxes on petrol and diesel except once to prevent further burden on common man despite Rs 30,000 crore revenue loss during the Covid pandemic. He said even though the average crude oil prices had come down drastically, the price of a litre of petrol was Rs 115.99 and diesel was Rs 108.66 on 1 November this year whereas it was Rs 76.89 for petrol and Rs 71.50 for diesel in May 2019.

The finance minister claimed that after the YSRC government came to power, the condition of roads deteriorated due to heavy rains and floods hence the government had undertaken development and repairs of 8970 km of roads across the state with a cost of Rs 2,205 crore. He defended that the government had imposed only one rupee per litre special duty for the roads on petrol and diesel and barring this no other taxes were imposed like the previous government which imposed huge taxes for various causes on petrol and diesel.

Rajendranath said the previous Telugu Desam government had imposed 31 per cent VAT and additional VAT of Rs 4 per litre on petrol and 22.5 per cent VAT and Rs 4 additional VAT on diesel which was continuing and their government did not impose any new additional VAT. He said surprisingly the Centre was demanding the state government to cut down the taxes despite earning Rs 2,87,500 crore avoiding divisible pools of petro income to states.

Meanwhile, BJP state president Somu Veerraju said Prime Minister Narendra Modi had asked states to reduce petrol and diesel prices on par with the Central government which was honoured by majority of states but AP continued to levy the highest prices. He recalled that Rs 4 was imposed on petrol and diesel for Amaravati and unfortunately it was still continuing despite halting the Capital Amaravati project and sought the reduction of VAT with immediate effect.