Odisha Sun Times Bureau
Bhubaneswar, Dec 24:
The revision of VAT would jack up petrol and diesel prices in the state by Rs 1.49 and Rs 1.33 per litre respectively.
The state cabinet, which met today, took a decision in this regard.
Briefing newsmen after the meeting, chief secretary GC Pati said the cabinet has approved the proposal to increase the rate of VAT in petrol and diesel from 20 percent to 23 percent.
“The state government took the decision after fall in the price of crude oil in the international market. Since several states have already hiked tax on these two items, the Odisha government also decided to take a similar step to increase tax that would help in terms of revenue,” additional chief secretary (Finance) R Balakrishnan said.
The state government expects to generate additional revenue of Rs 360 crore and Rs.90 crore from the hike in VAT for petrol and diesel respectively during the current fiscal, Balakrishnan said. As the retail price of diesel has been reduced by Rs 9.17 per litre in the last three and half months, there would be a loss of Rs 200 crore on VAT from petrol and diesel in the last four months of the 2014-15 fiscal, he added.
The state unit of Bharatiya Janata Party criticised the Odisha government decision to increase VAT on petrol and diesel prices by three per cent.
BJP spokesperson Sajjan Kumar came down heavily on the state government accusing it of being anti-people and adopting an agenda similar to the one pursued by the erstwhile UPA government t the Centre.
While people have heaved a sigh of relief and appreciated the steps taken by Modi government, the state government’s move on the pretext of revenue loss will be taxing for the common people, Sharma alleged. In the last six months since July 1, the petrol prices have been reduced by Rs 13 and diesel prices by Rs 9.17, he pointed out.
“On the one hand, the state government is claiming surplus revenue and on the other it is increasing petrol and diesel prices to compensate revenue loss. How justified is the move” Sharma asked.
Notably, the government increased the VAT from existing 20 per cent to 23 per cent with immediate effect. After the increase of VAT, petrol will now be costlier by Rs.1.49 and diesel by Rs.1.33.