No Vat-cut on fuel in Odisha, state Finance Minister

Odisha Government is not agreeing to cut VAT on petrol and diesel. State Finance Minister Sashi Bhushan Behera on Saturday categorically rejected the center’s – what he say “ridiculous and unreasoning”, call in this regard.

”There is no question of reducing VAT on petrol and diesel.” asserted the Minister, “since the state bears more loss than the centre due to the cut in the excise duty on petrol and diesel.”

The Union Petroleum and Natural Gas Minister Dharmendra Pradhan on 4th October had urged the states to reduce 5% of their respective VAT on Petrol and diesel soon after his Government in the centre cut excise duty by Rs 2 a liter..

Odisha loses 84 paisa towards its share in the reduced excise duty of Rs2, at the rate of 42 paisa as per the tax devolution formula, said Mr Behera and added that VAT loss in the Rs2 is 52 paisa. Thus total loss for Odisha in the process is Rs1.36.Where as it is Rs1.16 for the centre-that is its share in Rs 2 at the rate of 58 Paisa

According to the prevailing tax sharing formula based on the 14th finance commission’s suggestion the centre Keeps 58 paisa and gives away 42 paisa to the states as their share in a rupee tax collected.

The Odisha Finance Minister presented the calculation to reason why his government is not ready to reduce VAT on the fuel.

Earlier on the day he had called Union Minister Dharmendra Pradhan’s asking for VAT -cut “ridiculous and unreasonable.” while replying to media query in New Delhi on his way back to Odisha in ha after the GST council meeting.

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He criticised the Modi-Government for the way it is handling the fuel price matter. When the petroleum price has dropped drastically the Central government is spiraling up the fuel price on daily basis through the daily price review mechanism, said the BJD leader.

BJP has termed the Odisha Government’s attitude on this matter as “unfortunate”.

The BJD government which had resorted to hooliganism and had staged destruction on fuel price is exposed now, said BJP spokesman Sajjan Sharma.



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