Bhubaneswar I Dec 5, 2016
Petrol and diesel price in Odisha will now become more expensive as the state government has hiked Value Added Tax (VAT) on these products to improve revenue collection.
The department of finance on Tuesday increased VAT on petrol and diesel to 26%. It was 23% earlier. The 3% rise in VAT will fetch Rs 361cr extra to the state exchequer.
By virtue of a cabinet decision on December 31, authority to revise VAT rate on petrol and diesel has been bestowed on the department of finance.
With the revised VAT rate petrol price in Odisha would go up to Rs 59.95 and diesel price to Rs49.07. The increase in price is Rs 1.39 for petrol and Rs 1.13 for diesel.
Regular falls in price of the two principal fuels in the last one and half years has deprived the state treasury of Rs 417cr. To make up the loss raise in VAT has become necessary, reasons the government.
As an objective to justify the hike, finance Minister Pradeep Kumar Amat said that central government had hiked the tax rate by increasing basic excise duty, additional excise duty, special excise duty and cess on petrol from Rs 14737cr to Rs19360cr per thousand liters. In the case of diesel the tax rate has been raised from Rs 3563cr to Rs11830cr per thousand liters.
On January1central government had added Rs 1.27 on the basic excise duty on a liter of petrol and Rs1.98 on a liter of diesel.
The finance minister also added that other states are charging higher VAT on petrol and diesel than Odisha is charging.