Amaravati, Sep 13 (IANS): Under pressure from the dip in the regular flow of taxes into the state's coffers due to the Covid pandemic and further burdened by the treatment expenditure and multiple welfare schemes, Andhra Pradesh government on Saturday hiked the tax rate on natural gas from 14.5 per cent to 24.5 per cent.

"Taking all the factors into consideration, the government has decided to increase the rate of tax on natural gas from 14.5 per cent to 24.5 per cent by revising the tax rate under Schedule-V of the APVAT Act," said Special Chief Secretary Rajat Bhargava.

According to Bhargava, the Covid lockdown had resulted in the cessation of all economic activities in the southern state, affecting its revenues in the months of April, May, June, July and August.

"In April 2020, the revenue realized in the state was only Rs 1,323 crore as against Rs 4,480 crore realized in April 2009, which accounts for only 29.5 per cent of the total expected revenue," he said.

The tax revenue trend was similar in May, June, July and August.

"While the fall in revenues from all sources continued, there is a steep increase in the expenditure relating to health services for combating Covid pandemic, a observed the IAS officer.

At the same time, multiple welfare schemes such as Rythu Bharosa, Vaha Mithra, Jagananna Vidya Deevena, Jaganna Chedodu, Telemedicine, Zero interest loan scheme to women, Amma Vodi, Nadu Nedu and others are incurring steep expenditure on the state.

"Considering the fact that the revenues of the state are plummeting on one hand and the requirement for finances to implement the pro-poor schemes is escalating, on the other hand, it has become imperative to augment the revenues of the state," said Bhargava.

He said the government will publish the notification in an extraordinary issue of AP gazette, even as the government order (GO) comes into effect immediately.

Meanwhile, the state government was compelled to issue a clarification as some media houses are publicizing the tax hike on non-domestic natural gas as a tax hike on domestic liquefied petroleum gas used in the kitchens.

"It is being propagated in certain mischievous media that the government has increased tax on LPG. This is totally misleading. LPG is different from natural gas," said an official.

According to the official, LPG got subsumed into the Goods and Services Tax (GST) in 2017, on which the state government has no authority to tweak its tax rate.