Coronavirus: Economic activity has been severely hit by the COVID-19 lockdown.

Nagaland will charge a cess of Rs 5 of per litre on diesel and Rs 6 on petrol and motor spirit from Wednesday amid the unprecedented financial crisis triggered by the COVID-19 pandemic, the state government announced.

"In exercise of power conferred by subsection 3 of section 3A of the Nagaland (sales of petroleum and petroleum products including motor spirit and lubricants) Taxation Act, 1967 (as amended) the Governor of Nagaland is pleased to notify that in addition to existing rate of tax and cess, the COVID-19 cess shall be levied," the Additional Chief Secretary and Finance commissioner Sentiyanger Imchen in a notification said on Tuesday.

Assam recently increased prices of petrol and diesel by Rs 5 per litre and Meghalaya announced a 2 per cent sales tax surcharge to combat falling revenue.

Several states have voiced concerns of falling incomes with economic activity grinding to almost to a halt after Prime Minister Narendra Modi announced a nationwide lockdown last month to curb the spread of COVID-19.

The lockdown that began on March 25 and is up for an extension in parts of the country once it expires on May 3 is expected to severely impact direct and indirect tax collections, which were already suffering from an economic slowdown before the pandemic.