Govt increases VAT on Petrol, Diesel by 3%, clears Anti-Land Grab Ordinance

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Bhubaneswar, Dec 25: Odisha government hiked valued added tax (VAT) on petrol and diesel by three per cent with effect from midnight on Wednesday, putting additional burden on the consumers of the state while the prices of the fuel are reduced in the country.

This was decided by the Cabinet meeting chaired by chief minister Naveen Patnaik yesterday. With the revision of VAT on the fuel, the petrol and diesel prices were increased by  Rs 1.49 and diesel by Rs 1.33 respectively.

Addressing the media after the meeting, state chief secretary GC Pati said the cabinet has approved the proposal to hike the VAT rate on petrol and diesel from 20 percent to 23 percent.

"The state government took the decision after fall in the price of crude oil in the international market. Since several states have already hiked tax on these two items, the Odisha government also decided to take a similar step to increase tax that would help in terms of revenue," additional chief secretary (Finance) R Balakrishnan said.

"The state government expects to generate additional revenue of Rs 360 crore and Rs.90 crore from the hike in VAT for petrol and diesel respectively during the current fiscal, he said.

As the retail price of diesel has been reduced by Rs 9.17 per litre in the last three and half months, there would be a loss of Rs 200 crore on VAT from petrol and diesel in the last four months of the 2014-15 fiscal, he added.

The Cabinet that met yesterday also decided to promote the Odisha Land Grabbing (Prohibition) Ordinance-2014 once again to curb illegal land acquisition in the State. The Cabinet had approved to promulgate the ordinance on Nov 1. However, the ordinance could not be taken up as a Bill or discussed in the State Assembly as it was adjourned sine die following the continuous logjam over several issues including chit fund scam.

The Cabinet once again approved the ordinance yesterday with an aim to make it law within six months. No change has been made in the draft proposal of the ordinance. As per the ordinance, the land grabbing offence would be treated as a non-bailable crime and the culprit would face minimum seven years of jail term along with fine. Besides the land grabber, the abettor would also be punished. As per the ordinance, a special court with powers of civil and sessions court would be set up for dealing with the cases.

Apart from the hike in VAT and land grabbing ordinance the Cabinet also approved 11 others proposals including to amend the Odisha District Planning Committee Act-1998. As per the proposal, both the elected and nominated members of the committees would have now three years of tenure. A proposal related to the appointment of Advocate General Surya Prasad Mishra was also approved by the cabinet yesterday.

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