The state cabinet which met here Tuesday raised VAT on diesel from 9.60 per cent to 11.5 per cent.
This move is expected to bring in an annual revenue of Rs 27 crore to the hill state.
A month ago the state government had raised VAT on both diesel and petrol.
This despite the union government has been reducing prices of petrol and diesel in recent weeks due to rapid falling prices of oil in the international market.
The cabinet also gave its nod to amend rule 40 of the VAT Rules 2005 and sub –rule 7 of Central Sales Tax (Himachal Pradesh) Rules 1970.
Approval was also given to table the HP Town and Country Planning (Amendment) Bill 2014 in the upcoming assembly session.
This controversial move will pave the way for regularisation of unauthorised constructions across the state.