KalingaTV News Network
Bhubaneswar: Rejecting the Union government’s plea, Odisha government today announced it would not reduce VAT on petrol and diesel.
Earlier, the Centre had urged all the states to cut sales tax or VAT by 5 per cent to ease the burden on consumers after it cut the excise duty by Rs 2 per litre on petrol and diesel.
Finance Minister Sashi Bhusan Behera today said that the state government will not reduce VAT on petrol and diesel.
Speaking to the reporters, Behera said the state government, as per the Centre-state devolution mechanism, is bearing a loss of 84 paise at the rate of 42 paise per rupee out of the Rs 2 reduction in excise duty by the Centre. Besides, the state is also losing 52 paise which it would have collected as VAT at 26 per cent on that Rs 2, he added.
In the process, the state is incurring a total loss of Rs 1.36 after the Centre’s reduction of excise duty on petrol and diesel by Rs 2 per litre.
Since the State is bearing greater loss than the Centre after reduction in excise duty, there is no question of cutting VAT, said the Finance Minister.
After the Centre slashed the excise duty on petrol and diesel by Rs. 2 per litre, Union Petroleum and Natural Gas Minister Dharmendra Pradhan had urged the states to cut VAT on petrol and diesel by 5 percent.
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