As VAT is "consciously linked" to Excise Duty, the relief will only be to that extent while other state levies like Road Development Cess continue to add up to the final price.
Value Added Tax on petrol and diesel in Andhra Pradesh came down by Rs 1.51 and Rs 2.22 a litre respectively, consequent to the reduction in Excise Duty, government sources said.
VAT is levied at the rate of 31 per cent on petrol and 22.25 per cent on diesel in AP.
As VAT is “consciously linked” to Excise Duty, the relief will only be to that extent while other state levies like Road Development Cess continue to add up to the final price.
Government sources, however, claimed that the consequential reduction in VAT translated to an annual benefit of Rs 226 crore on petrol and Rs 888 crore on diesel to consumers.
They said the government would suffer a loss in revenue of Rs 1,114 crore per annum as a result of the drop in VAT.
“After revision of Excise Duty by the Central government, the basic VAT components also stand reduced from Rs 10.19 to Rs 8.68 per litre on petrol and from Rs 7.07 to Rs 4.85 on diesel,” the sources added.
Petrol price is now Rs 109.91 while that of diesel is Rs 96.03 a litre in AP.
The government tabulated the VAT figures as the opposition parties have been agitating, demanding that the state slash the rate in line with the Centre’s reduction of Excise Duty to provide some relief to consumers.