Odisha hikes VAT on petrol, diesel to 26%

Rate hike necessitated by plunge in prices of two petroleum products

Odisha government today burdened consumers with a hike in VAT rate on petrol and diesel from 23% to 26%. Following the hike, the government would collect an additional revenue of Rs 361 crore per year.

The government said the rate hike was necessitated by plunge in prices of the two petroleum products in the last one and a half years wherein it suffered a loss of Rs 417 crore.

The VAT rate has been revised by the finance department after obtaining order of the chief minister. According to a decision in the last cabinet meeting held on December 31, the finance department has been authorised to hike VAT rates on petrol and diesel after due approval from the chief minister's office.

VAT rates on petrol and diesel were last revised in the state in December 2014 when the rate was hiked from 20 to 23%. After the latest rate revision, the retail selling price of petrol would be Rs 59.95 a litre while diesel would be priced at Rs 49.07 a litre.

Between April 2, 2014 and January 2, 2016, the Centre has enhanced tax rate on petrol by 108% by announcing increase in basic excise duty, additional excise duty/special excise duty and cess.

Likewise, the spurt in tax rate on diesel over the same period is 288.09%.

Other states are charging higher VAT on petrol- Andhra Pradesh (39.66%), Telengana (35.20%), Maharashtra (32.07%), Punjab (36.44%), West Bengal (28.52%), Uttar Pradesh (33.88%), Uttarakhand (35.98%), Tamil Nadu (27%), Sikkim (31.65%), Rajasthan (32.71%), Jharkhand (34.74%), Karnataka (32.30%), Kerala (34.27%) and Madhya Pradesh (34.46%).

In diesel too, some states are levying higher VAT than Odisha- Andhra Pradesh (32.72%), Telengana (27%), Maharashtra (28.93%) and Kerala (27.35%). Only Jharkhand (25.17%) and Chhatisgarh (25%) have lower rates compared to Odisha.