Petroleum Minister Dharmendra Pradhan urges Odisha to cut VAT on fuel instead of blaming Centre for price rise

Reduction in central excise and VAT is the only way for the Centre and the States to bring down the fuel price.

Published: 24th May 2018 02:41 PM  |   Last Updated: 24th May 2018 04:14 PM   |  A+A-

Dharmendra Pradhan. (Photo: Reuters)

By Express News Service

BHUBANESWAR: Under fire from Opposition over unprecedented fuel price hike, Union Minister for Petroleum and Natural Gas Dharmendra Pradhan once again appealed the Odisha Government to consider for reduction of VAT on petrol and diesel.

"A number of factors are responsible for the surging oil prices which are beyond the control of the Government. Soaring prices of global crude oil and fluctuation in currency exchange rates are the two major factors," Pradhan told reporters here on Thursday.

Reduction in central excise and VAT is the only way for the Centre and the States to bring down the fuel price. The Centre has already reduced the excise duty by Rs 2 per litre since October last year.

"I had appealed the State Government then to take a similar step by reducing the VAT on petrol and diesel to reduce the burden on the consumers. However, the State rejected my request. I have no hesitation to appeal the State Government once again to consider for a tax reduction on the two essential items," Pradhan said.

Acknowledging the resentment of the people as genuine, the Union Minister said the Centre is fully aware of the matter and trying to work out a solution to deal with the situation.

Pradhan, who had a series of meeting with oil marketing companies and ministry officials in the last two days, criticised the ruling BJD for its decision to protest the fuel price hike instead of advising the State Government to reduce VAT.

The Petroleum Minister said that several States have already reduced VAT on petrol and diesel while States like Goa are collecting only 12 percent tax on petroleum products.

Noting that a bulk of the central tax are spent on development works, Pradhan said 42 percent of the tax goes to the States while 70 percent of the rest is provided for different centrally sponsored schemes.

Reiterating the proposal of the oil ministry to bring petroleum products under the purview of GST, Pradhan said all States should endorse his proposal.

Odisha Finance Minister Shashi Bhusan Behera, however, rubbished his claims. He said 26 percent VAT imposed by the State on petroleum products is one the lowest in the country. The central excise is much higher than the tax colleced by the State Government, he said.

Lashing out at the Centre, Behera said the Union Minister is trying to cover up the failure of his Government by shifting the blame to the States. "All States will definitely take a decision if the matter is taken up at the GST council," Behera added.

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