)
The Telangana government today revised the value added tax (VAT) rates on petrol and diesel to neutralise the recent cut in fuel prices.
Last month, the government had added Rs 2 on every litre of petrol and diesel over and above the existing VAT of 31 per cent and 22.25 per cent respectively.
In its latest orders, it removed the ‘Rs 2 per litre’ clause while raising the tax rate to 35.20 per cent on petrol and 27 per cent on diesel.
The officials of the commercial taxes department said the revised rates would have no additional impact on the fuel prices though petrol bunk dealers said they were yet to get a clarity on this.
Prior to the revision, petrol and diesel stood at around Rs 65 and Rs 55 respectively.
The government of the undivided Andhra Pradesh had reduced the tax rates on petrol to 31 per cent from 33 per cent towards the end of 2013 in response to a general appeal given to states by the UPA government to reduce the high state taxes on petroleum products. The undivided AP stood number one in the country in terms of high tax rates on fuels and liquor.
The fall in fuel prices made matters difficult for both the governments of Telangana and Andhra Pradesh as they were already struggling to implement the costly electoral promises like farm loan waiver. Taxes on petrol and diesel comprise more than 25 per cent of the commercial tax revenues.
Following the revision of fuel tax last month, Telangana officials said they were going to adjust the tax rates to arrest any further fall in petrol and diesel prices.
Meanwhile, the AP government is also said to have decided to increase the tax on petrol and diesel.
