Odisha Govt turns down FAOTA demand of replacing VAT with ET

As strike by traders who are demanding exemption of VAT on pulses and wheat products entered the third day, the Odisha government today said the proposal for introduction of 1 per cent entry tax in lieu of 5 per cent VAT is not possible at this juncture.
Since the matter of imposition of entry tax on agricultural products was pending before the Supreme Court, it was not possible to fulfil the traders' demand, finance minister Pradip Kumar Amat said.
The Federation of All Odisha Traders' Association (FAOTA) had submitted a representation for exemption of 5 per cent VAT on dal, pulses and wheat products and levy of 1 per cent Entry Tax thereon.

Stating that there was no Entry Tax on Agriculture produces in Odisha at present, Amat said the constitutional validity of the Entry Tax was challenged and pending before the constitutional bench of the Supreme Court and the state has filed an affidavit to maintain status-quo.
"Entry tax cannot be levied on dal and pulses at this stage," Amat said adding Entry Tax and VAT would be subsumed in the proposed GST and an uniform tax rate would be in force throughout the country.
As per the recommendation of the Empowered Committee of State Finance Ministers, four per cent VAT has been levied on dal, pulses and wheat products, Amat pointed out.

"Again on the recommendation of the Empowered committee, five per cent VAT instead of four per cent, has been levied from April 1, 2012. Neighbouring states like West Bengal, Jharkhand and Chhattisgarh have not implemented the recommendation of the Empowered Committee and exempted dal, pulses and wheat products, which resulted in the alleged trade diversion," Amat said.