The State Government on Tuesday increased the Value Added Tax (VAT) on diesel and petrol prices by three per cent from present 23 per cent to 26 per cent.
Now, a litre of petrol costs Rs 1.39 more and a litre of diesel becomes dearer by Rs1.14 after the hike.
The State Cabinet, which had met on December 31, empowered the Finance Department to decide on a proposal to enhance VAT on the two fuels.
“By increasing the VAT by 3 per cent on petrol and diesel, the State will get additional revenue of `361 crore per year. It will fetch additional revenue of `90 crore in the next three months by March-end,” Finance Minister Pradip Kumar Amat said justifying the hike.
Meanwhile, various political parties have come down heavily on the Government for the VAT hike and demanded immediate rollback of it.
“The State Government should have used the slashing of crude oil for controlling price rise of essential commodities. But, it is disappointing that the Government has increased VAT on petrol and diesel by bringing miseries to people interest,” BJP spokesperson Sajjan Sharma said in a statement.
He demanded that the hike be rolled back soon as the same is not at all acceptable to the common people.
Similarly, Samajwadi Party denounced the hike. “The VAT hike will have cascading effect on people. It will cause of bus fare hike and further rise in essential commodities,” said SP State president Rabi Behera. He too demanded that Government roll back the decision forthwith.
“The State Government only sheds crocodile tears for the people but is least concerned about their miseries. VAT was increased twice in 2014 and this increase will put an additional burden on the consumers,” said Congress leader Sulochana Das.
The Government has contended that there has been a significant tax revenue loss for the exchequer on account of a steep fall in oil prices internationally. The Government is losing `470 crore every year on account of low oil prices, informed sources.