Kerala to withdraw tax on essential items

State Budget had proposed to tax commodities like rice, wheat, sugar

The Kerala government today decided to withdraw the decision to impose fresh tax on food items announced in the Budget last week.

The decision came in the light of widespread criticism over the tax proposals not only from the public but even from the ruling United Democratic Front (UDF).

The move will see rollback of a decision to impose tax on rice and rice products and wheat at one per cent, and for maida flour, atta flour and sooji rava at  5 per cent.   

A two per cent tax on sugar and a tax hike on coconut oil by 1 per cent would also be withdrawn.  A high-level meeting of the UDF held today decided to avoid taxes on essential items.

After the Budget announcement, the trade sector and the common people criticised the move saying it would evoke a price rise.

The Budget had envisaged an additional revenue of Rs 260 crore through taxes on essential commodities. It also proposed to hike duty on diesel and petrol by Re 1 every litre.