Everything to cost more as vats 5% now

HYDERABAD: In a major shock, the state government hiked the value-added tax (VAT) on goods notified under Schedule IV of the Andhra Pradesh VAT Act of 2005 from the existing 4 per cent to 5 per cent. As a result, prices of all major commodities including essentials, clothes and spices are expected to shoot up with effect from Wednesday.Due to the decision, the state government will earn revenue of about `2,300 crore including `1,000 crore from central taxes every year. Defending the decision, chief minister Kiran Kumar Reddy told reporters that VAT has been increased by 1 percentage point to ensure that the state does not lose its share of `1,000 crore from the central taxes.