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Bhubaneswar, Oct 7: Stating that Orissa has been incurring losses due to cuts in excise duty on petroleum products, Finance Minister Sashi Bhusan Behera Saturday rejected the Centre’s plea to reduce VAT on petrol and diesel.
The Centre had urged all the states to cut sales tax or VAT by 5 per cent to ease the burden on consumers after it slashed the excise duty by Rs 2 per litre on petrol and diesel.
After reducing the excise duty on petroleum products, Union Petroleum and Natural Gas Minister Dharmendra Pradhan had urged all the states to cut sales tax or value added tax (VAT) by 5 per cent to ease the burden on consumers.
“Under the devolution process, the Centre’s share is 58 paise per rupee in terms of Central excise duty collection while 42 paise comes to the states. Hence, the Centre has to shoulder Rs 1.16 on the Rs 2 while we are sharing the burden of 84 paise,” Behera told reporters here.
Moreover, due to the curtailment of Rs 2 in excise duty, the state would lose 52 paise which it used to get at the rate of 26 per cent towards VAT. Thus, the Orissa government has been incurring a loss of Rs 1.36 while the Centre is bearing Rs 1.16 per litre, he argued.
“Hence, the question of reducing VAT does not arise when the state bears more losses than the Centre due to cuts in excise duty”, the Finance Minister asserted.
Behera, a senior BJD leader, has also attacked the Modi government for the fuel price hike after the introduction of daily fuel price mechanism. “While the international crude price has been falling drastically, the Centre has been resorting to upward revision of prices on monthly, weekly and now on daily basis.”
Criticising Prime Minister Modi, the BJD leader said, “When he (Modi) was the Chief Minister of Gujarat, he had attacked the then UPA government on the spiralling prices of fuel at a time when the international price of crude was high. Before pointing fingers at the state government, the Centre should have introspected first.”
Reacting to Behera’s statement, BJP spokesperson Sajjan Sharma said here the BJD government does not want to pass on the relief to the people of Orissa from the escalating price burden owing to fuel. From the minister’s statement it is quite evident that consumers in Orissa will have to cough up more money towards fuel, he added.
So far, poll-bound Gujarat is the only state which has accepted the Centre’s proposal to reduce VAT on petrol and diesel. No other states, including BJP-ruled ones, have accepted Pradhan’s proposals.
