By Bizodisha Bureau, Bhubaneswar, October 7, 2017: Odisha on Saturday turned down the Union government’s request to the states to reduce Value Added Tax (VAT) on petrol and diesel. Kerala is the only state, which earlier had refused to reduce VAT on petrol and diesel.

“We won’t reduce VAT on petrol and diesel as the state will register a dip in revenue collection,” finance minister Sashi Bhusan Behera tld media persons.

Union petroleum and natural gas minister Dharmendra Pradhan earlier had requested the state governments to reduce VAT on fuel following excise duty cut by Rs 2 per litre on petrol and diesel b y the union government. The Centre had urged the states to cut sales tax or VAT by 5 per cent to ease the burden on consumers.

Odisha will incur a loss of 84 paisa at the rate of 42 paisa per rupee as per the devolution process following reduction in excise duty of Rs 2. Besides, the state would also lose 52 paisa which it would have collected as VAT at 26 per cent on that Rs 2 as excise duty.

Behera blamed the union government for rising fuel prices despite decline in the international crude prices.