Nagaland levies COVID-19 cess on petrol and diesel 

Nagaland has imposed a Rs 5 per litre COVID-19 cess on diesel and Rs 6 per litre cess on petrol and other such motor spirits. 

Apr 30, 2020 11:33 IST
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Nagaland state government on April 28, 2020 imposed a COVID-19 cess on diesel and petrol, becoming the first state to introduce such a tax in India. The decision was taken to meet the financial requirements of the state amid coronavirus pandemic.

Nagaland has imposed a Rs 5 per litre COVID-19 cess on diesel and Rs 6 per litre cess on petrol and other such liquid fuel. 

The state government said in an official notification that it had taken the step by exercising its power listed under sub section 3 of section 3A of the Nagaland (Sales of Petroleum and Petroleum Products including Motor Spirit and Lubricants) Taxation Act, 1967 ( amended).


The main objective behind the move is to boost revenue collection for the state, as all its revenue options have stopped amid the lockdown imposed to contain coronavirus outbreak. Nagaland Chief Secretary Temjen Toy said that the state has been facing major revenue problems due to lockdown. 

Toy stated that a state like Nagaland is always dependent on the Centre. 

Key Highlights 

Nagaland decided to levy the COVID-19 cess in addition to the existing rate of tax and cess on diesel, petrol and other motor spirits. It shall be levied against entry serial number 3&4 of schedule II of the Act. 

The COVID-19 cess on diesel and petrol came into effect in the state from midnight of April 28.

Nagaland had a target to earn about Rs 106 crore in March 2020 but the state was able to collect only Rs 5 crore. 

Currently, all the sources of revenue collection in the state have been halted due to the ongoing nationwide lockdown.


Though Nagaland is the first state to impose a COVID-19 cess on petrol and diesel, Assam had also in a recent move hiked the prices of diesel and petrol by Rs 5 and Rs 6 respectively on April 21.  Meghalaya has also been charging sales tax surcharge on motor spirit such as petrol at 2 percent. 

According to experts, Nagaland’s move to impose coronavirus tax on motor spirits could encourage other states to impose a similar cess, which will have an adverse impact on India’s overall economy. The tax on petrol and diesel forms a significant part of the states’ total revenues. Almost all states across India are facing revenue constraints due to a halt in economic activities amid the ongoing nationwide lockdown. 

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