The State government slashed the Value Added Tax (VAT) on petrol and diesel by Rs 3 per litre each after the union government reduced the excise duty on the fuel.
The VAR reduction will be implemented from midnight hours of 5 November to provide further relief to consumers who were bearing the brunt of continuous price hikes on petroleum products.
The state’s exchequer will incur an annual loss of Rs 1,400 crore owing to the VAT reduction and the decision to reduce VAT was taken to provide relief to common people, who were distressed by the relentless hike in fuel prices, a statement issued by Chief Minister Naveen Patnaik’s office on Thursday said.
This would be in addition to the loss of Rs 700 crore the state would face due to the excise duty reduction by the central government, it said.
Overall, the state would lose approximately Rs 2,000 crore annually, the statement maintained.
Once the new rates are applicable, diesel price per litre will go below Rs 100, while petrol will be available at a little over Rs 100 per litre, it added.
From Saturday, the prices of petrol and diesel will be reduced by Rs 9.60 and Rs 15.80 per litre respectively after the decisions of the central and the state governments are implemented in Odisha.