Bhubaneswar; Jan.5: Odisha government's decision to raise Value Added Tax (VAT) on petrol and diesel by 3 per cent has come into effect from today
With this, the government increased the tax from existing 23 percent to 26 percent,
The state cabinet had decided to hike VAT on petrol and diesel on December 31 and had entrusted the responsibility to review the implications of the VAT hike and decide on the quantum of hike to the Finance department. .
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 Rs 470 crore every year on account of low oil prices.
Notably, there has been decline in the revenue from petrol and diesel due to gradual fall in the price of crude oil in the international market and deregulation of prices. This has affected the VAT collection adversely prompting the state government to increase the rate by 3 percent.