Andhra Pradesh reduces VAT on petroleum products

Tax reduced by Rs 2 per litre

Andhra Pradesh Chief Minister N Chandrababu Naidu on Monday announced that the Value Added Tax (VAT) on petrol and diesel will be reduced by Rs 2 per liter in the state.

The decision came after Naidu held a high level meeting with officials in the wake of Bharat Bandh, during which the TDP, Naidu's party, also participated in the state-wide agitations.

Naidu announced the decision on the floor of the house during a discussion in the state Assembly.

It is to be noted that Andhra Pradesh has the third highest percentage of VAT on petrol (35.77%) after Maharashtra and Madhya Pradesh, while it has the highest percentage of VAT on diesel i.e 28.08%.

“I am concerned over the plight of the common man. Even though the state is undergoing severe financial crunch we are reducing Rs 2 per liter. This will make a dent of Rs 1,120 crore to the exchequer,” Naidu said.

He accused the NDA government at the Centre of misleading the people by attributing the steep hike in the prices of petrol and diesel to the growing crude oil prices globally.

“During 2013-14, the crude oil prices were $ 105.52 per barrel. But when the price fell down to $ 46 dollars, too, the Centre did not reduce the petrol and diesel prices. Now, the crude oil costs $ 70 per barrel, but the Centre is increasing the petrol and diesel prices abnormally every day,” he said.

He said that his government had taken a decision to give partial relief to people who have suffered the impact of demonetization by reducing the VAT by Rs 2 per liter.

Sources in the TDP say that in the wake of elections, the chief minister’s decision will give a tremendous political mileage to the party.

Meanwhile, the bandh call given by the Congress, Janasena and left parties in the state had a partial impact.

While transport services came to a halt particularly in Vijayawada, Guntur and Kadapa, in other places a few offices worked as usual.

Meanwhile, the Congress cadre prevented many state-owned transport buses from functioning by stopping them at the depot gates and several CPI and CPM leaders were arrested for blocking roads.

However, the Opposition YSRCP stayed away from participating in the bandh.