Odisha extends 1% levy on dal till March, 2017

Anticipating implementation of Goods and Services Tax (GST) from April 2017, Odisha government has extended the tenure of collection of VAT (value added tax) on dal and pulses at a reduced rate of one per cent till March, 2017.
 
After the persisting demand from traders, the state government was forced to reduce rate on these commodities from five per cent to one per cent for a period of three months since July 2016 and subsequently the benefit was extended for another three months.

The consumption of pulses in the state is pegged at about 0.95 million tonnes with a business turnover of about Rs 6,500 crore. Odisha produces 1,30,000 tonne of pulses and relies heavily on imports to meet the domestic demand.
 
Sources said, with the five per cent VAT earlier, the state should have collected Rs 325 crore revenue from the sale of these commodities per annum. But the collection was only Rs 39 crore in the last financial year.
 
The traders had assured the government that the revenue from dal would go up to around Rs 60 crore per annum from the existing Rs 38 crore after VAT rate was reduced.
 
The traders had gone on a two-day strike in December 2014, stopping import of pulses, wheat and wheat products to press for their demand for waiver of the levy.
 
In 2015, the traders had resorted to five-day long strike and called it off after the state government announced setting up of a committee to examine their demand of lifting VAT on pulses, wheat and wheat products. In 2016, the traders had once again stopped importing the pulses demanding withdrawal of VAT.
 
“ The one per cent levy will continue till implementation of GST. There is no levy on food grains under the Goods and Services Tax Act”, said Sudhakar Panda, general secretary , Federation of All Odisha Traders Association (FAOTA).