DEMAND OF WITHDRAWAL OF VAT ON WHEAT BY TRADER is justified but decision to stop bringing pulses, wheat and wheat products from other states is unwarranted as it will lead to hoarding and rise of wheat, flour prices All Odisha Traders Association has decided to stop bringing pulses, wheat and wheat products from other states from December 9, protesting against 5% value added tax (VAT) imposed on the items by the state government. About twenty-three states of the country have exempted VAT on the pulses, wheat and wheat products No other state has imposed tax on pulses and food grains, essential for survival. For this Odisha consumers have to pay extra for the same commodities compared to other states, which encourages black marketing and tax evasion. . Consumption of pulses in the state stood at about nine lakh tonnes with a business turnover of about Rs 4,500 crore. Odisha produces less than 10 per cent of the total demand. Similarly, the demand of wheat and wheat products in Odisha is estimated at 1.2 million tonnes while the output of these items in the state is pegged at 0.35 million tones. Traders said, the state government collects about Rs 30 crore VAT from pulses against the target of Rs 225 crore as unscrupulous traders are importing the item through back channels from neighboring states where it enjoys VAT exemption and not reporting the import or sale of the item to avoid tax. Five per cent levy makes the price less competitive compared to the other states resulting in rise of unfair practices. With five per cent VAT there is a difference in price of Rs 300 per quintal of pulses, .Instead the state government can impose 2 per cent entry tax, which can fetch Rs 100 crore revenue per annum. Traders say 1 percent . It is also said that the flou rmill owners have also decided to shut down their mills. Flour millers generally depend on Bihar and West Bengal for procurement of wheat. Due to non-viability, out of 55 mills, only 19 mills are operating at present lower capacities, However, demand of withdrawal of vat on wheat by trader is justified but decision to stop bringing pulses, wheat and wheat products from other states is unwarranted, as it will lead to hoarding and rise of wheat, flour prices. Similarly, government should try to encourage the production wheat etc. It should give emphasis on agriculture.
Posted on: Tue, 09 Dec 2014 15:17:32 +0000
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