Bhubaneswar, May 29: The Cabinet chaired by Chief Minister Naveen Patnaik today accorded post facto approval to the VAT hike of petrol and diesel.
The state government had hiked VAT rate on petrol from 26 percent to 32 percent increasing Rs 3.11 per litre and on diesel from 26 percent to 28 percent increasing Rs 1.03 per litre with effect from May 17.
The last revision of VAT rate on petrol and diesel was made on May 1 in 2016 raising from 23 percent to 26 percent.
The Centre has increased cess and special excise duty of Rs 10 per litre on petrol and Rs 13 per litre of diesel with effect from May 6. Thus, the Centre is collecting total tax of Rs 32.98 per litre of petrol and Rs 31.83 per litre of diesel.
With the new hike, the state government is collecting VAT of Rs 16 per litre of petrol and Rs 14.34 per litre of diesel.
The collection of additional revenue would be utilised for delivery of services in health, education and other social sectors, said the state government.