Bhubaneswar: Rejecting Centre's plea, Odisha Finance Minister Sashi Bhusan Behera today said that Odisha Government will not reduce VAT on petrol and diesel.
After cutting the excise duty by Rs 2 per litre on petrol & diesel, the Centre had urged all the States to cut sales tax or VAT by 5 per cent to ease the burden on consumers.
Behera said, out of the Rs 2 reduction in excise duty by centre, the State government, as per the devolution process, is bearing a loss of 84 paisa at the rate of 42 paisa per rupee. Moreover, the state is also losing 52 paisa which it would have collected as VAT at 26% on that Rs 2, he stated.
Hence, State is incurring a total loss of Rs 1.36 after the Centre reduced excise duty on petrol and diesel by Rs 2 per litre. So, how does the question of cutting VAT arise when the State is bearing more loss than the centre due to excise duty reduction, asked Behera.
He further added, the Centre is increasing the fuel prices even if the prices have reduced in the international market.
Earlier this week, the Centre had slashed Rs 2 excise duty on petrol and diesel following which Union Petroleum and Natural Gas Minister, Dharmendra Pradhan on October 4 had asked the states to cut VAT on petrol and diesel by 5 per cent.