Telangana and AP government not to cut VAT on petrol, diesel

Hyderabad: Telangana and AP governments are in no mood to cut VAT on petrol and diesel to enable further reduction in fuel prices as sought by the Centre.

Both the Telugu states are  among the states which collect highest VAT on fuel in the country.

The governments cite revenue loss caused to state exchequer on acco-unt of GST for not cutting VAT on fuel.

The VAT on fuel remains the major source of income for both the governments. Out of Rs 60,000 crore taxes, the TS earns every year, the VAT on fuel alone comprise Rs 25,000 crore.

TS officials say, the reduction in fuel prices by over Rs 2 per litre due to  excise duty cut by Centre on Tuesday would alone cause around Rs 3,000 cro-re loss to TS as it imposes VAT on overall price and it cannot afford to lose revenue further by reducing VAT on fuel  as GST already caused over Rs 400 crore loss in the first month.