Chief Minister Naveen Patnaik termed the diesel price hike as ‘breakdown and failure’ of economic policy of the central government and demanded immediate roll back of the hike.
“The steep rise in diesel prices will affect every person. This will increase price of essential commodities like food items and also raise transport cost,” Patnaik said.
However, the state government has ruled out the possibility of any cut in sales tax on diesel. “Our sales tax on diesel stands at 18 per cent and the tax rate is the lowest amongst many states. Our tax rate is also below the level of 20 per cent prescribed by the empowered committee of state finance ministers,” said a senior official of state finance department. In 2011-12, the state government realised Rs 1,345 crore from diesel sales. This included Rs 1,274 crore collected by way of sales tax and Rs 71 crore as entry tax. Sales tax on diesel accounts for more than 70 per cent of overall collection on petroleum products, which, in turn, contributes 25 per cent to the state’s commercial tax kitty. The hike in diesel prices is expected to add nearly Rs 13 crore every month to the state exchequer.
