State tax adding to fuel prices in Telangana | Hyderabad NewsFebruary 16, 2021
Incidentally, this state tax is only prevalent in the two Telugu states, Andhra Pradesh and Telangana, across the country. The tax is levied over and above the Value Added Tax (Vat) that is charged on fuel — 33% on a litre petrol and 26% on a litre of diesel.
This additional tax, industry sources say, was initially introduced in the neighbouring state, post the bifurcation of erstwhile AP. Subsequently, Telangana too followed suit. Both states charge Rs 4 per of fuel, though the latter has now slashed the tax on diesel.
“This tax significantly increases the cost of fuel in these two states. While the collection gets deposited in the government coffers, petrol pump owners do not get a single rupee. Their commission is fixed at an average of Rs 3.40 per litre for petrol and Rs 2.30 per litre for diesel,” said a source.
While the continuous escalation in cost — also driven by the extra state tax — has had little impact on the sale of petrol in the state, fuel dealers confess that diesel sales have taken a beating. “The state has been losing business on account of extra tax levied here on diesel. Since the cost in neighbouring states such as Karnataka is less, transport vehicles — or even those who travel there frequently — fill their tanks there. As a result, we lose business and the state losses its income,” said Marri Amarender Reddy, president, Telangana Petrol Dealers Association.