State traders up ante against imposition of VAT

Peeved at the recent cabinet decision to impose VAT (Value Added Tax) on textile and sugar, the traders across the state have decided to go on agitational path from next week.

The cabinet decision to impose levy on these two items along with its endorsement for hike in the base VAT rate from four per cent to five per cent is likely to be reflected in the state budget for 2012-13, which will be presented in the assembly tomorrow.

Both the measures together are expected to net additional revenue of Rs 530 crore to the state government.

“We are just waiting for the presentation of the budget on February 24.State finance minister has assured us to ruminate on the imposition of five per cent tax on sugar. Plans are afoot for a state wide protest after the presentation f the budget if the government does not take a holistic approach in this regard,” said Sudhakar Panda, Chairman, Bhubaneswar Merchant Association.

Besides Andhra Pradesh, where VAT is partly implemented on sugar, no other neighbouring state has imposed the levy on this sweetener, he added. Panda said disparity in tax and price would only encourage unscrupulous traders and loss of revenue for the State government.

In inter-state border areas there would surely be inflow of sugar from adjoining states into Orissa by these unscrupulous elements to cash in on the price disparity, he pointed out.

The wholesale price of sugar, which is now Rs 3,150 per quintal, is likely to shoot up by Rs 200 per quintal. Similarly, the textile traders, smarting under the cabinet decision, are planning to launch a state-wide agitation demanding withdrawal of entry tax which collected at two per cent from textile products.

“We are planning protests against the collection of entry tax from March first week after executive meeting of the association which is slated to be held in next four to five days,” said Mohanlal Jain, general secretary, All Orissa Textile Merchant Association.

The traders feared that due to imposition of five percent VAT and two percent entry tax, the cost of the textile products in the state will be dearer by 20 per cent forcing the consumers to turn to neighbouring states where these products will be cheaper as no other state including West Bengal, Jharkhand and Andhra Pradesh are collecting entry tax on textile items.

It may be noted that after announcing VAT rate of four per cent on textile and sugar last year, the government was forced to withdraw the levy following intense pressure from the agitating traders.