Bhubaneswar: Odisha Government has revised the Value Added Tax (VAT) rate for tobacco and has proposed to impose a higher tax on tobacco and its products.

Sources said that the tax rate on the tobacco would be increased from the existing 13.5 per cent to 25 per cent. It has also been decided to charge tax on unmanufactured tobacco, beedis and tobacco used in the manufacture of beedis at the rate 10 per cent.

In addition to that mobile phones costing more than Rs five thousand will now cost still more as the existing VAT rate has been increased from 4 per cent to 13.5 per cent.

However, the Government has also decided to reduce the existing rate of tax on certain items like Escavator, Bulldoger, Back loader, Glass Sheet, Plywood, Laminated sheet, Particle board, Structural sheet, Coconut oil, barbed wire, Iron and Steel structures used in industries etc. The VAT rate of these products have been reduced from 13.5 per cent to 4 per cent.

State Finance Minister, Mr. Prafulla Chandra Ghadei, has informed that this revision has been made keeping in view the tax rates in the neighbouring States and the grievances of the trade bodies dealing in certain goods.