Odisha traders to stop import of pulses, wheat products from tomorrow

Demand waiver of five pc VAT on these food items

Protesting against government inaction over withdrawal of value added tax (VAT) on pulses, wheat and wheat products, the traders will stop import and sale of these items from Tuesday, raising fears of acute shortage of the essential food products in the state over the next few days.

The traders' bodies have been demanding exemption of VAT on the commodities as is the case in majority of the states in the country. About twenty three states of the country have exempted VAT on the pulses, wheat and wheat products. "The import of pulses, wheat and wheat products will be stopped from Tuesday. The ban on imports will continue indefinitely unless the state government agrees to our demand," said Odisha Byabasahi Mahasangha secretary, Sudhakar Panda.

With wholesalers stopping the import pulses and wheat products, the stock of these items available with the retailers is likely to dry up in next couple of day leading their acute shortage in the state.

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 tonnes.

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 neighbouring 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," Panda added.

Instead the state government can impose one per cent entry tax which can fetch Rs 50 crore revenue per annum, he argued. "The exemption or levy is the prerogative of the finance department and cannot be decided in a day or two. The row can be resolved through dialogues," said Madhusudan Padhi, secretary, food, supplies & consumer welfare department.

Expressing their solidarity the traders' strike call, the flour mill 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, said a source.