Bhubaneswar, Jan 5: The Odisha government on Tuesday increased by 3 percent the Value Added Tax (VAT) on petrol and diesel inviting strong criticism from the opposition parties and the common people.
With this hike, the price of petrol has gone up by Rs.1.39 to Rs.59.96 per litre, while the price of diesel has been increased by Rs.1.14 to Rs.49.8 per litre.
The state government increased the tax from existing 23 percent to 26 percent to mop up more revenue, said Finance Minister Pradip Kumar Amat.
"By increasing the VAT by 3 percent on petrol and diesel, the state government will get additional revenue of Rs.361 crore per year. It would get Rs.90 crore additional revenue in the next three months during the current fiscal," said Amat.
He said the central government is hiking tax on the petroleum products to generate more revenue when the price of the product is decreasing in the international market.
"We have hiked the price of petrol and diesel to keep a balance in revenue collection," said Amat.
The hike did not go down well with the opposition, which demanded a roll-back.
"While the people of Odisha are suffering from price rise of essential products, the state government, which only sheds crocodile tears, has hiked the price of petrol and diesel only to add to the burden of the common people," said state Congress president Prasad Harichandan.
Demanding a roll-back of the decision, he said both the state and central governments were competing against each other to raise tax on these products.
The state government was protesting the hike in petrol and diesel prices during the former UPA regime, said the Congress president.
Basant Panda, Bharatiya Janata Party's legislative party leader, said the state government's move proved that it does not bother about the plight of the people in the state.