Goa to impose VAT on petrol, Odisha raises VAT on petrol, diesel

Panaji

Reneging on a major poll promise made in its manifesto, the BJP-led government today announced that the decision to abolish Value Added Tax on petrol after coming to power in Goa, would now be reversed.

“We will implement five per cent value added tax (VAT) on petrol. We have noticed that the cost of petrol is lesser than diesel in Goa, which is not fair. The state government will impose five per cent VAT on petrol so that its price is little more than diesel,” Chief Minister Laxmikant Parsekar told PTI today on sidelines of launching police helpline for senior citizens.

He said that petrol prices would be matched with diesel.

“At present, petrol prices in Goa are the lowest.

Petrol per litre is costing Rs 53 and diesel Rs 55. The imposition of VAT will hike petrol prices to Rs 55-56 per litre,” Parsekar said.

BJP led government after assuming power in the state in 2012 had abolished VAT on petrol as an anti-inflation measure reducing the prices on fuel by almost Rs 11 per litre.

The decision which was taken by then chief minister Manohar Parrikar was hailed across the country.

“We had abolished VAT because petrol prices were rising and it was anti-inflation measure. The decision to abolish VAT was received well by people and the government was appreciated for it. But if you look at the current situation, petrol prices are reducing. Also inflation is under control, so there is no requirement to abolish VAT,” the Chief Minister said.

“I am taking the decision in larger interest of the state and I know that the people will understand it,” he said, responding to a question.

The CM said that the state treasury had suffered after abolition of VAT on petrol.

“We also suffered set back in the form of mining closure which took away 25 per cent of our revenue flow. The government worked out additional resource mobilisation to compensate for the loss. But if we get money from petrol VAT then it will also help the treasury,” he said.

The VAT imposition is expected to bring in Rs 70-75 crore more to the coffers.

Odisha raises VAT on petrol, diesel

Petrol and diesel in Odisha will now cost more by Rs 1.49 per litre and Rs 1.33 per litre respectively with the state Cabinet today deciding to increase the VAT to 23 per cent from the current 20 per cent.

“The new price will be enforced with immediate effect,” Chief Secretary G C Pati told reporters after the Cabinet meeting.

Petrol, which used to cost Rs 61.64 per litre, would now cost Rs 63.13 a litre. Similarly, the price of one litre of diesel would be Rs 55.66 as against the earlier Rs 54.33.

With this decrease in rates, within a span of just over five months, the retail price of petrol has been reduced by Rs 12.39 per litre.

While, within a span of three-and-a-half months, the retail price of diesel has been reduced by 9.17 per litre.

Justifying the government’s decision on raising the VAT on the petrol and diesel, Pati said that due to reduction of prices, there will be a loss of around Rs 200 crore to the state exchequer in the last four months of 2014-15 fiscal.

Pati said in view of continuous fall in the prices of crude, the central government increased the excise duty by Rs 1.50 per litre on petrol and diesel with effect in November and further hiked it by Rs 2.25 per litre on petrol and Rs 1 per litre of diesel this month to recoup losses in revenue.

Replying to a question, Pati said by the proposed tax rationalisation, the state will generate an additional revenue to the tune of Rs 360 crore per annum and Rs 90 crore during the remaining period of the current fiscal.

In another decision, the Cabinet also approved a proposal to streamline tax administration by modification of the Odisha VAT Act, 2004. “The cabinet approved a proposal to increase threshold limit for tax payment from Rs 1 lakh to Rs 10 lakh in case of manufacturers and from Rs 5 lakh to Rs 10 lakh in case of general traders,” Pati said.

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