The Odisha government on Tuesday increased the Value Added Tax (VAT) on petrol and diesel by 3 per cent.
Accordingly, the VAT on petrol and diesel has now increased from 23 per cent to 26 per cent. The state government has contended that there has been a significant loss of tax revenue for the exchequer on account of a steep fall in international oil prices and is losing around Rs. 470 crore annually on account of low oil prices.
State finance minister Pradeep Amat said by increasing 3 per cent VAT on petrol and diesel, the government will generate tax revenue of Rs. 361 crore more annually. However, the Opposition parties have criticized the government’s move on tax hike.