Gujarat govt rolls back 5% VAT on industrial salt

Gujarat government has rolled back 5% Value Added Tax (VAT) imposed on industrial salt in the 2016-17 budget.

The move comes after opposition from salt manufacturers for the imposition of VAT.

A decision to this effect was taken at the Cabinet meeting held yesterday.

"Keeping the interest of salt producers in mind, the government has decided to completely roll back 5% VAT that was imposed on industrial salt during this year's budget," an official release said.

"The government received representation from salt producers who highlighted difficulties in differentiating industrial salt and salt producers cannot properly maintain record. Taking their representation positively, the government has taken this important decision," it added.

Salt producers had earlier threatened strike demanding complete roll back on VAT, which was imposed for the first time in the state.

They said that 5% VAT on industrial salt, introduced in the 2016-17 budget, is full of technical complexities which expose them to harassment from VAT inspectors.

Bachubhai Ahir, who led agitation against imposition of VAT, welcomed the decision saying that the move was positive and salt producers have been saved from major hassle.

"This is a welcome step and we thank (Gujarat) government for positively understanding our concerns," Ahir, who is the president of Small Scale Salt Manufacturers' Association, said.

Ahir, however, added that the government was yet to take back additional tax of 10 paise per square metre added on land used by salt pan workers to produce salt.

"We have demanded from revenue department to take back the additional tax on non-agricultural land used by salt workers, especially as this will affect small producers," he said.

Gujarat produces 176 lakh tonnes of salt annually, and contributes to nearly 70% of salt requirement of the country.

Of 176 lakh tonnes, 46 lakh tonnes is used for consumption, while 60 lakh tonnes is for industrial use.

As much as 60 lakh tonnes salt is sent out to other states, of which around 30 lakh tonnes is industrial salt, the quantity on which VAT was to be imposed.