BHUBANESWAR: Petrol and diesel will come down by Rs 10.23 and Rs 7.36 per litre respectively in Bhubaneswar from 6 am on Sunday following the excise duty cut announced by the Centre on Saturday. Petrol will cost Rs 102.71 per litre while diesel will be Rs 95.87 per litre.
Excise duty imposed by Centre on petrol and diesel is Rs 27.90 per litre and Rs 21.80 per litre respectively. It will now come down to Rs 19.9 per litre and Rs 15.6 per litre respectively.
While the State government has not given any indication of reducing VAT correspondingly as it has done in earlier occasions, the move by the Centre has put pressure on it.
Financial minister Niranjan Pujari, who was away campaigning for the bypoll in the Brajrajnagar Assembly constituency scheduled on May 31, said that the State government is yet to study the implications of the excise duty reduction. The government will take a view on this soon, he said.
VAT on petrol and diesel is one of its major source of revenue generation for the State. Odisha government raises Rs 5,500 crore from VAT on petrol and diesel annually, official sources said.
The State government had reduced VAT on petrol and diesel by four per cent each in November, 2021 after the Centre’s decision to cut down excise duty. However, it had not reduced VAT on petrol and diesel following the call given by Prime Minister Nerendra Modi in April this year as it had done so earlier. The government had maintained that there is no scope for further reduction in VAT on petroleum products.
The government now imposes VAT of 28 per cent and 24 per cent on petrol and diesel respectively. In May 2020, the Centre had increased taxes on petrol and diesel by Rs 10 per litre and Rs 13 per litre to shore up revenues impacted by the Covid pandemic. Odisha government had also hiked VAT on petrol from 26 per cent to 32 per cent and diesel from 26 per cent to 28 per cent.
General secretary of the Utkal Petroleum Dealers’ Association Sanjay Lath said that as the price of petrol and diesel will come down following the reduction of excise duty, revenue from VAT on petrol and diesel will also come down by Rs 2.23 per litre and Rs 1.36 per litre respectively. The subsidy of Rs 200 per gas cylinder to Ujjwala beneficiaries will benefit nearly 57 lakh households in the State.