After slashing petrol price by Rs 2 per litre, the Centre now wants that the States, including Odisha, cut sales tax or VAT on petrol and diesel by 5 per cent so that fuel prices would come down further.
Union Petroleum Minister Dharmendra Pradhan on Wednesday said Finance Minister Arun Jaitley would soon write to all State Chief Ministers urging them to cut VAT on petrol and diesel.
“The Union Government has cut excise duty by Rs 2 per litre, sacrificing revenue of Rs 26,000 crore per annum. Now, it’s the turn of States to reduce VAT to give relief to consumers,” he said.
He said the States get all of the VAT collection plus 42 per cent of the Central Excise collections.
Odisha Finance Minister Shashi Bhushan Behera said the excise duty reduction effected by the Centre on petrol and diesel is very low and asking the States to reduce VAT is not justifiable.
“The Odisha Government imposes a low rate of VAT on petrol and diesel compared to other States. Hence, we will not slash VAT,” Behera said.