Amat bats for uniform tax on pulses, wheat

As traders refuse to budge from their stand to discontinue imports of dal, pulses and wheat from other states, state finance minister Pradip Amat has pitched for a uniform tax rate on these agricultural products to help break the deadlock.

Amat has written to the empowered committee of state finance ministers to convene a meeting for uniform tax rate on dal, pulses, wheat products and other agriculture products throughout country.

"Traders are demanding withdrawal of VAT (value added tax) on dal, pulses and wheat products. But our state government cannot take a unilateral decision on it. That is something to be decided at the level of empowered committee of state finance ministers," Amat told Business Standard.

He said the VAT is being levied on dal, pulses and wheat products as per the recommendations of the empowered committee.

Regarding the demand of the Odisha Byabasayee Mahasangha (traders' body) to levy entry tax, the minister said, "There is no entry tax on agriculture products at present. The constitutional validity of the Entry Tax has been challenged and the matter is sub judice with the Supreme Court. Our government has also filed an affidavit in the apex court to maintain status-quo. So, no entry tax can be levied on agricultural products. The state government's limitations has been conveyed to the traders' body."

Total annual consumption of dal in the state comes to 755,920 tonne valued at Rs 4,500 crore. As per traders' estimates, five per cent can fetch the state Rs 226 crore but the government is actually getting Rs 40 crore every year. Should one per cent entry tax be levied instead of five per cent VAT, the state government can gain more by way of revenue, the Odisha Byabasayee Mahasangha reasoned. "Annually, VAT of around Rs 400 crore is being collected in Odisha from dal, pulses and other agricultural products. So, in the present scenario any exemption on the tax rate of dal, pulses and wheat products will result in less collection of revenue for the state. The state will also get less compensation from the Government of India," said a government release.

Meanwhile, the cessation on imports of pulses and wheat by traders entered the second day today. "For the second day, we have not resorted to import of pulses, wheat and wheat products. We have called a steering committee meeting of the Federation of All Odisha Traders Association on Sunday to decide the future course of action," said Sudahakar Panda, general secretary of the association.