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Petrol and diesel prices in Odisha would be dearer as the state Cabinet today approved hike in VAT (value added tax) on the two petroleum products from 20 per cent to 23 per cent.
The hike would be applicable with immediate effect- a move that would raise petrol prices in the state by Rs 1.49 a litre and that of diesel by Rs 1.33 per litre.
“Taking into account the reduction in retail prices of petrol and diesel and the hike in excise duty of these products by the central government, the Cabinet has decided to hike VAT to 23 per cent from 20 per cent currently. The notification of the hike would be issued today itself. The decision will have an annual implication of incremental revenue of Rs 90 crore for the state government by the end of this fiscal and Rs 360 crore annually based on present prices of petrol and diesel,” said R Balakrishnan, additional chief secretary (finance) after the Cabinet meeting.
He pointed out that retail prices of petrol has fallen from Rs 74.03 a litre (as on July 1, 2014) to Rs 61.64 per litre now. Within a span of five and a half months, petrol prices have plunged by Rs 12.39 a litre while diesel prices have come down by Rs 9.17 a litre. The price fall has resulted in revenue loss of Rs 200 crore for the state government in this period.
With deregulation of prices of petrol and diesel, the central government has also raised excise duty on these products twice. Balakrishnan said, the Madhya Pradesh and Rajasthan governments have already revised their VAT rates on petrol and diesel.
“The Madhya Pradesh government has raised VAT on petrol from 27 to 31 per cent and that of diesel from 23 per cent to 27 per cent. Likewise, Rajasthan hiked its VAT rate on petrol from 26 per cent to 30 per cent and on diesel to 22 per cent from 18 per cent. Besides, the trend in falling prices of petrol and diesel is affecting tax collection adversely,” he said. In another key decision, the state government raised the threshold limit for liability to pay VAT from Rs 1 lakh to Rs 10 lakh for manufacturers and from Rs 5 lakh to Rs 10 lakh in case of general traders.
Moreover, the turnover limit for retailers to pay turnover tax has been increased from Rs 40 lakh to Rs 50 lakh.
The Cabinet also approved the proposal for promulgation of an Ordinance- Odisha Land Grabbing (Prohibition) Ordinance Act, 2014.
“Since the Bill could not be introduced in the last assembly session, the Ordinance has been approved. A special court will be set up under the provisions of the Ordinance to deal with cases of land grabbing,” said chief secretary G C Pati.
Under the Ordinance, land grabbing would be made cognizable and non-bailable offence. The land premium of government land within the limits of Bhubaneswar Municipal Corporation (BMC) under the jurisdiction of the general administration (GA) department would be revised at par with the benchmark value adopted by the additional district magistrate, Khurda.
