On his birthday on Tuesday, chief minister N Kiran Kumar Reddy issued orders increasing Value Added Tax (VAT) on 3,000 common goods from 4 per cent to 5 per cent, effective from Wednesday. TOI had reported the state government's plan to effect such a hike a fortnight ago.

GO No 1718 issued on Tuesday by the revenue department increased the tax for goods in schedule-IV list. Starting from salt, match box to IT software, all products which are taxed at 4 percent at present will attract 5 percent from now onwards. The one percent increase will fetch the state government an additional revenue of Rs 1,600 crore every year.

The other items that will come under the hike include pulses, cotton, vegetable oils, coconut oil, bricks, yarn, coffee, tea products, vanaspati, umbrellas, bicycles tri-cycles, rickshaws, wheat, rice, paddy, steel and aluminum equipment, jaggery, flour, atta, maida, suji, besan, maida, pesticides, jaggary, iron, zinc, copper, bulk drugs, IT software, hardware, electrical calculators, crude oil, drugs and medicines, cosmetics, medicated goods, all intangible goods including copyright, patent, licensed goods, tiles, beedi leaves, micro phones, telephone equipment, radio communication equipment, printed circuits, footwear, paper, readymade garments, sewing machines, silk fabrics, skimmed milk, all spices, sports goods, tamarind, tractors, tyres, tubes, wheels, minerals, jute, printing ink and salt.