Chief Minister Naveen Patnaik on Thursday announced reduction of VAT of Rs 3 on petrol and diesel. The announcement came a day after the Central Government reduced excise duty on petrol and diesel by Rs 5 and Rs 10, respectively.
The new rates of petrol and diesel would come into effect from Friday midnight.
In view of this reduction, the loss of VAT revenue to the State exchequer would be to the tune of Rs 1,400 crore per annum.
This is in addition to loss in VAT collection @ Rs 1.6per litre on petrol and Rs 2.8 per litre on diesel, total amounting to Rs 700 crore, which the State is likely to incur in view of Excise Duty reduction by the Central Government.
