Odisha traders want withdrawal of VAT on pulses, wheat products

Consumption of pulses stands at about nine lakh tonnes with a business turnover of about Rs 4,500 cr

Traders in the state have threatened to go on a stir if state government fails withdraw the five% VAT (value added tax) on sales of pulses, wheat and wheat products by August end.

" Odisha being a consuming state, VAT on flour, suji, maida and pulses should not be levied. The levy is not there in 23 states of the country", Sudhakar Panda, secretary of the Odisha Traders' Association told media persons on the side line of launching of fortified wheat flour by Shree Jagannath Flour Mills and Subhalaxmi Industries in association with Global Alliance for Improved Nutrition (GAIN) and Roller Flour Millers Federation of India (RFMFI).

Consumption of pulses in the state stood at about nine lakh tonnes with a business turnover of about Rs 4500 crore. Odisha manages to produce only 10% of the total demand.

State government collects about Rs 30 crore revenue against the collection target of about Rs 225 crore due to the unfair means of doing business by the traders, he added.

Traders said that five% levy is making the price less competitive compared to their counterparts resulting in rise of unfair practices. With five% VAT there is a difference in price of Rs 300 per quintal of pulses.

Instead the state government can impose one% entry tax and about Rs 50 crore will go to the state coffers, he added.

The association has taken up the matter with the government many times. If any measures are not taken up by the government by August end we will take a final call on the issue at the association meeting. We may go for strike even, said the secretary.

Flour millers generally depend on the Bihar and West Bengal for procurement of wheat.

Due to non viability out of 50 mills only 20 mills are in operations, said a miller. State consumes about three lakh tonne of wheat and wheat products.

With the imposition of one% of entry tax and removing the VAT the state can earn more revenues as the neigbouring states are relying on Andhra Pradesh and West Bengal ports for import of pulses, traders said.

India imports about Rs 80,000 crore of pulses annually.