Vijayawada: The Taxpayers Association has called on the Andhra Pradesh state government to eliminate the additional VAT and road development cess imposed on petrol and diesel. The association argues that the heavy tax burden is causing fuel prices to soar, placing an unbearable financial strain on the public.
Memorandum Submitted to Chief Minister and Finance Minister
In a memorandum submitted via email to the Chief Minister and Finance Minister on Thursday, the association demanded immediate intervention to reduce fuel prices. It highlighted several factors contributing to the continuous rise in petrol and diesel prices, including international crude oil policies, the decision not to purchase cheaper crude oil from Russia, the abolition of the Administrative Price Mechanism (APM) by the then NDA government in 2002, and the heavy taxes imposed by both the Central and state governments.
Current Tax Structure on Petrol and Diesel
Specifically addressing state-levied taxes, the association pointed out that the government currently levies 31% VAT on petrol and 22.5% VAT on diesel. Additionally, an extra VAT of Rs 4 per litre on petrol and Rs 3.07 per litre on diesel is collected. A road development cess of Rs 1 per litre is also imposed, on which VAT is again charged.
Through these taxes and cesses, nearly Rs 25,000 crore reportedly flows into the state treasury every year, the association said. The association appealed to the state government to provide relief to consumers by reducing at least some of these taxes.
Demand for Abolition of Additional VAT and Road Cess
The association specifically demanded the complete abolition of the additional VAT and road development cess on petrol and diesel. It urged the government to reduce the existing VAT rates to at least 20%.
