The Odisha cabinet Wednesday announced a 3 percent increase in Value Added Tax (VAT) on petrol and diesel prices, making the fuels costlier in the state.
The government increased the tax from existing 20 percent to 23 percent with immediate effect.
After the increase of VAT, petrol will now be costlier by Rs.1.49 and diesel by Rs.1.33.
"The cabinet has approved the proposal to increase the rate of VAT in petrol and diesel from 20 percent to 23 percent," Chief Secretary G.C. Pati told media persons.
Additional Chief Secretary (Finance) R. Balakrishnan said: "We took the decision after fall in the price of crude oil in the international market. Several states have already hiked tax on the two items and we also decided to increase tax that would help in terms of revenue."
The state government expects to generate additional revenue of Rs.360 crore per annum and Rs.90 crore during the current fiscal.
Balakrishnan said the retail price of diesel has been reduced by Rs.9.17 per litre in the last three and half months.
Due to the reduction, there would be a loss of Rs.200 crore on VAT from petrol and diesel in the last four months of the 2014-15 financial year.
The cabinet also approved a proposal to issue an ordinance to prevent land grabbing activities in the state.
While the cabinet had passed an ordinance on this bill earlier, it took the decision to promulgate the Odisha Land Grabbing (Prohibition) Ordinance, 2014 once again, as the bill could not be tabled in the assembly in the winter session.
Pati said the ordinance will provide for criminal prosecution of land grabbers, which could end in imprisonment of one year to seven years, with a fine which may extend to Rs.20,000.
He said the offence shall be cognizable and non-bailable while a special court would be established which will deal with land grabbing cases.
It also approved amendment in the Odisha State Armed Police Act, which will be tabled in the next assembly session.
