VIJAYAWADA: The government on Saturday increased the fixed charge component in value added tax (VAT) on petrol and diesel in the state. The hike will see petrol become dearer by 76 paise, while diesel will cost Rs 1.07 extra per litre. The new rates will come into force from the first hour on Sunday.
The government had, on January 29, made changes to the VAT tariffs by removing the earlier fixed charge on petrol and diesel. The tariffs were revised from 31% on petrol to 35.2%, and from 22.25% to 27% on diesel. By increasing the tariff, the government removed the fixed charge of Rs 2 per litre being collected on both petrol and diesel. Now, the tariffs have been reverted to the previous 31% and 22.25% on petrol and diesel respectively, but the fixed charge component has been reintroduced. In place of Rs 2 per litre, the fixed charges have now become Rs 2.76 on petrol and Rs 3.07 on diesel per litre.
The fall in prices of crude oil in the international market and the removal of fixed charge component had an adverse affect on the government’s coffers. Earlier, the government used to get fixed revenue from the sale of petrol and diesel despite the fluctuation in prices. But the recent fall in fuel prices has resulted in fall in revenues. The move to reintroduce the fixed charge is being seen as an attempt to bridge that gap.
AP has been collecting the highest VAT on petrol and diesel when compared to its southern counterparts. Photos of fuel stations putting up huge banners comparing local fuel prices to that in AP in the border areas of Karnataka and Tamil Nadu to attract consumers have gone viral on social media many times before.
The government had, on January 29, made changes to the VAT tariffs by removing the earlier fixed charge on petrol and diesel. The tariffs were revised from 31% on petrol to 35.2%, and from 22.25% to 27% on diesel. By increasing the tariff, the government removed the fixed charge of Rs 2 per litre being collected on both petrol and diesel. Now, the tariffs have been reverted to the previous 31% and 22.25% on petrol and diesel respectively, but the fixed charge component has been reintroduced. In place of Rs 2 per litre, the fixed charges have now become Rs 2.76 on petrol and Rs 3.07 on diesel per litre.
The fall in prices of crude oil in the international market and the removal of fixed charge component had an adverse affect on the government’s coffers. Earlier, the government used to get fixed revenue from the sale of petrol and diesel despite the fluctuation in prices. But the recent fall in fuel prices has resulted in fall in revenues. The move to reintroduce the fixed charge is being seen as an attempt to bridge that gap.
AP has been collecting the highest VAT on petrol and diesel when compared to its southern counterparts. Photos of fuel stations putting up huge banners comparing local fuel prices to that in AP in the border areas of Karnataka and Tamil Nadu to attract consumers have gone viral on social media many times before.
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