Vijayawada: The Andhra Pradesh government, on 18 September, introduced an ordinance to levy a road development cess of Re. 1 per litre on petrol and high-speed diesel that would net around Rs. 500 crore annually.

Governor of Andhra Pradesh Biswabhusan Harichandan cleared the ordinance amending the Andhra Pradesh Value Added Tax Act 2005.

On 3 September, the state Cabinet had approved the decision to impose the road development cess for the development of roads in the state. The government has decided to levy the cess in addition to the existing levies on petrol and diesel.

Proceeds of the cess will be around Rs. 500 crore per annum, the special chief secretary (revenue), Rajat Bhargava, said. The cess amount would be transferred to the Andhra Pradesh road development corporation (APRDC) for exclusive use in developing road infrastructure, he added.

The Y.S Jagan Mohan Reddy-led state government has increased the tax on automobile fuel for the second time in the past two months. On 20 July, the government had revised the tax structure on petrol and diesel, increasing their price by Rs. 1.24 and Rs. 0.93 per litre, respectively, to mop up additional revenue of about Rs. 600 crore per annum.

The new cess will be used for carrying out road works, including the much-needed repairs, through the APRDC.

With the new cess, the AP government has imposed a total tax of Rs. 23.66 on a litre of petrol and Rs. 18.53 on a litre of diesel.

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