The Madhya Pradesh government on Friday decided to impose five per cent VAT on liquor, petrol and diesel. The decision was taken in view of the extensive damage caused by heavy rains to the state, an official said, adding the VAT would help generate additional revenue.
Madhya Pradesh had suffered an estimated loss of Rs 12,000 crore due to excessive rains this monsoon, a senior official said. The five per cent Value Added Tax will be a temporary measure, he added.
The increase in prices came into effect from midnight, he said.
This is the second time in two months that the Kamal Nath government has hiked taxes/surcharge on petrol and diesel. Earlier in July, prices of the twin petrol products had gone up by around Rs 4.5 per litre.
With the latest tax hike, petrol will now be priced Rs 81.66 per litre and diesel Rs 72.96 per litre in the Central Indian state.
The prices of country-made and Indian made foreign liquor have also been raised by five per cent.