HYDERABAD: A close scan of VAT (value-added tax) levied by states in the country shows that Telangana has the second-highest VAT for both petrol and diesel in the country.

With petrol price hovering at Rs 94.18 and diesel at Rs 88. 31 per litre, experts said the high VAT will lead to additional cost for consumers each time there is a change in base price by oil companies. Currently, the state is charging 35.2% as VAT for petrol per litre and 27% for diesel per litre.
Rajasthan leads in the country with the highest tax across the country at 36% VAT on petrol and Rs 1,500 per kilo litre as road development cess.
Odisha is the top state in having the highest VAT on diesel with 28% followed by Telangana with 27%.
Karnataka closely follows Telangana with 35% tax on petrol, while Andhra Pradesh, Assam, Delhi, Kerala and Madhya Pradesh are other states which have more than 30% VAT on petrol per litre.
In case of diesel, Rajasthan and Chhattisgarh are the only states having more than 25% VAT along with Telangana.
Earlier, Telangana used to levy about 33% tax on petrol and additional Rs 4 as additional tax. But some time back the state adjusted the tax to only 35% without additional tax.
Applying the present rate and VAT% of diesel and petrol, consumers are paying Rs 17.79 and Rs 23.06 per litre respectively to the state government directly. Though excise duty levied by the central government on per litre petrol is constant at Rs 32.90 and Rs 31.80 for diesel, the VAT levied by state governments goes up each time there is a base price change and consumers are forced to shell out extra.
Industry sources say the small change in the price in the last one week helped Telangana earn Rs 100 crore.
But there is a flip side to it also.
“Because of the high VAT on diesel, states will lose the volume of sales to other states. For example, Karnataka has high VAT on petrol but due to less VAT on diesel, it is able to attract diesel buyers (mostly transport vehicles) from other states. This will dent the state’s income as well as petrol bunk sales,” a source privy to the development said.