Bhubaneswar, Oct. 4: A day after the central government reduced excise duty of fuel by Rs 2 per litre, the state government today said it would not be able to reduce the value added tax (VAT) on fuel as it was already collecting lesser tax on it compared to other states.

Responding to a suggestion from Union petroleum minister Dharmendra Pradhan to slash VAT as the Centre had reduced the excise duty by Rs 2 per litre on petrol and diesel, state finance minister Sashi Bhusan Behera said: 'We are collecting lesser VAT compared to other states. Taking the price of petroleum products at the international market, they should have done more on this section. The reduction of only Rs 2 per litre on petrol and diesel will have no impact on the rising prices.'

An official said that in the BJP-ruled states such as Maharashtra, Uttar Pradesh, Uttarakhand and Jharkhand, the VAT on petroleum products was 32.07 per cent, 33 per cent, 35.98 per cent and 34.74 per cent, respectively, whereas in Odisha, it was 26.01 per cent.

Pradhan had said: 'The Centre has proactively reduced excise duty by Rs 2 per litre. On this account, the Centre will sacrifice Rs 26,000 crore revenue. Now, it's the turn of states to reduce VAT.'

He said: 'States are the biggest beneficiary. They get all of the VAT collection and also avail themselves of 42 per cent of the central excise collections. The amount remaining with the Centre is used to finance centrally sponsored schemes in states.'

In another development, the state BJP unit has intensified its attack on the BJD, accusing it that was shedding crocodile tears on the issue. 'The Centre has done its job. Now it's the turn of the state government to reduce the VAT,' said BJP spokesperson Sajjan Sharma.

On September 18, the BJD organised a five-hour strike in the state to protest the rising price in petroleum products.

Deficit rainfall

The state has received 10.1 per cent deficit rainfall during the peak monsoon season from June to September, official sources said. The cumulative average rainfall in Odisha from June to September, 2017 remained 1,028.3mm against the long term average of 1,144.3mm, which accounts for a deficit of 10.1 per cent, special relief commissioner B.P. Sethi said. 'Of all districts, only Gajapati received surplus rainfall of more than 19 per cent during the period.'