Hyderabad: About 8,500 trucks in Andhra Pradesh that carry petroleum products such as petrol, diesel and LPG cylinders will be off the roads following an indefinite strike call by petroleum dealers from February 21 demanding oil companies shoulder the burden of 5 per cent Value Added Tax.
According to AP Petroleum Dealers Cum Tank Trust Operators Welfare Committee, oil companies did not implement issues including VAT clause in the tenders despite reaching an agreement with them and they had decided to go on strike.
Committee's general secretary M Kumara Swamy said in September last year, oil companies wrote a letter to the state government saying they cannot implement the earlier agreed burden of 5 per cent, but will implement in the upcoming new tender from April 2013.
However, in the tender notification issued by oil companies on January 30, 2013, there was no mention of bearing the 5 per cent VAT, it said.
"We demand that tax arrears till March 31, 2013 of the current tender be borne by the oil companies and secondly in the new tender notification they should clearly mention about their commitment to bear tax in the new contract, which will be implemented from April 2013," Kumara Swamy told PTI.
The committee said VAT was first imposed on transport operators of oil companies in 2005, but they were ignorant of it till 2008. On November 7, 2011, the state government, during a meeting with oil companies and transport operators, had decided to forgo its earlier arrears.
Besides, a decision was taken to reduce VAT from 14.5 per cent to 5 per cent, which will be paid by oil companies instead of transport operators, the committee said.
The association also demands that the estimated cost fixed by each oil company in various locations of the state be standardised instead of the existing system.