In its efforts to raise more funds for tackling drought in the state, Maharashtra government has decided to levy a surcharge of Rs 2 on petrol and diesel.

Mumbai: In its efforts to raise more funds for tackling drought in the state, Maharashtra government has decided to levy a surcharge of Rs 2 on petrol and diesel while VAT on liquor, cigarettes and beverages have also been raised by 5 percent.

The surcharge on Value Added Tax (VAT) for gold and diamond jewellery will be 1.20 percent.

The measures, which will come into effect from midnight will be in force for five months, state's Finance Minister Sudhir Mungantiwar said here. The measures would be reviewed in the next budget session, he added.

Talking to the reporters after the Cabinet meeting, Mungantiwar said the exchequer will get an additional revenue of Rs 1,600 crore.

"Chief Minister Devendra Fadnavis has asked all departments to make a list of how to generate more revenue and cut down on expenditure. We will have a special Cabinet meeting to discuss the same next month," Mungantiwar said. He said due to reduction in prices of petrol and diesel, there has been a revenue deficit of Rs 300 crore per month.

"The government has also decided to waive off LBT on petrol and diesel. This will result in total loss of Rs 1,800 crore to the state treasury," he said. The minister said since the government was giving so much concession for the common man, it is seeking additional Rs 2 on petrol and diesel to provide relief to the farmers.

He also said since 1 August, Local Body Tax (LBT) has been waived off for businesses with turnover of less than Rs 50 crore. Similarly, the LBT has been waived off for alcohol, beverages and cigarette as well.

Mungantiwar said fiscal burden was about Rs 7,500 crore due to various steps being taken by the government to mitigate hardships of the farmers reeling under unseasonal rains, drought, crop loss and water scarcity.

PTI