Bhubaneswar: A day after the central government cut excise duty on petrol and diesel, Odisha Chief Minister Naveen Patnaik today announced reduction of Value Added Tax (VAT) of Rs 3 each on petrol and diesel which will be applicable from midnight of November 5.
This is over and above the reduction in excise duty announced by Government of India.
The Centre slashed excise duties on petrol and diesel by Rs 5 and Rs 10 per litre respectively.
In view of this reduction, the loss of VAT revenue to state exchequer will be to the tune of Rs 1400 crore per annum. This is in addition to loss in VAT collection at Rs. 1.6/ litre on petrol and Rs. 2.8/ litre on diesel, total amounting to Rs 700 crore, which the state is likely to incur in view of Excise duty reduction by Government of India.
Hence, the total loss to state exchequer on account of reduction in VAT is approximately Rs 2000 crore.
With this reduction, the petrol & diesel prices in the state are likely to be one of the lowest in the country.