BHUBANESWAR: Anticipating a further rise in fuel prices, the BJD on Sunday demanded that the state government withdraw value-added tax (VAT) from petrol and diesel and move the Centre for their inclusion in GST.
BJD spokesperson Lenin Mohanty said Chief Minister Mohan Charan Majhi should write to the Centre seeking inclusion of petrol and diesel in GST as it would help reduce the prices of essential commodities.
Stating that it was BJP’s main demand when the party was in the Opposition in Odisha, Mohanty said state president Manmohan Samal, who is also a Rajya Sabha MP, should pressurise both the Centre and the state government in this regard.
BJD Rajya Sabha MP Sasmit Patra has also written to Union Finance minister Nirmala Sitharaman, requesting that the proposal be placed on the agenda for the upcoming GST Council meeting.
“An indicative GST rate of 28 per cent on petroleum products would drastically reduce prices. In Odisha, this will reduce petrol price by Rs 28 per litre and diesel price by around Rs 14 per litre,” he said.
The BJD leader said taxing fuels under GST would save the middle-class households nearly Rs 1,500 monthly and reduce freight and agricultural input costs. Acknowledging that petroleum taxes significantly contribute to state revenues, he proposed that a phased inclusion model, transitional compensation support and a limited cess be introduced to ensure fiscal stability of the state.
Odisha earns about Rs 9,700 crore annually from VAT on petroleum products. Petroleum products (including motor spirit and high-speed diesel) are eligible to be brought under GST. However, their actual inclusion requires a formal recommendation and consensus from the GST Council.