Odisha's government on Saturday raised the Value Added Tax (VAT) rate on petrol to 32 per cent from 26 per cent and on diesel to 28 per cent from 26 per cent earlier, effective Saturday, May 17, 2020.
Petrol will now cost Rs 71.69 per litre against the current rate of Rs 68.58. Similarly, the diesel will cost Rs 67.73 per litre while it was selling at Rs 66.70 under the old VAT rate.
According to the Odisha's government statement, VAT rate on petrol and diesel is increased by Rs 3.11 per litre and Rs 1.03 per litre, respectively.
The additional revenue collected would be utilised for delivery of services in health, education and other social sectors, as per the press statement of Odisha government.
Following the price revision, the state government will collect a VAT of Rs 16.60 per litre on petrol and Rs 14.34 per litre on diesel.
The government statement added that after the VAT increase, the retail sale price of petrol in Bhubaneswar will be less than in many other cities in India. Further, diesel prices across the state will be less than or at par with other cities in India.
The last revision of the VAT on fuel was made on January 5, 2016, from 23 per cent to 26 per cent.
The Centre has increased the cess and special excise duty on fuel prices, thus collecting a total tax of Rs 32.98 per litre on petrol and Rs 31.83 per litre on diesel.
Elsewhere, other states have also increased VAT/Sales Tax on petrol and diesel during the months of March, April and May 2020. These include Assam, Nagaland, Maharastra, Karnataka, Rajasthan, Haryana, Tamilnadu and Delhi.