States not in favour of uniform tax on wheat, rice: Food Ministry

Earlier a panel for revamping state-run FCI had recommended bringing down state taxes to 3% uniformly in states on wheat and rice

The Food Ministry is of the view that it was not possible to implement the Shanta Kumar-headed high-level committee's recommendation to impose uniform tax on wheat and rice as state governments are not in favour of it.

Earlier, the PM-constituted panel for revamping the state-run Food Corporation of India (FCI) had recommended bringing down state taxes to 3% uniformly in states on wheat and rice or include taxes in the minimum support price (MSP) of these crops.

"We have discussed the matter with state governments. They have not agreed on uniform taxation. So, it is not possible to implement this recommendation of the panel," a senior Food Ministry official told PTI.

Even it is not justified to include taxes and commission in the MSP, the official added.

At present, taxes on wheat and rice vary from state to state. The taxes include purchase fee, sales tax, market fee, arhtiyas' commission and other charges.

According to official data, taxes on wheat procurement in Punjab is highest at 14.5%, followed by Haryana at 11.5%, Madhya Pradesh at 9.2% and Uttar Pradesh at 8.5%, as per the official data.

Similarly taxes on rice purchase in Punjab is maximum at 14.5%, followed by Andhra Pradesh at 12.5%, Haryana at 11.5% and Madhya Pradesh at 4.7%.

The government procures wheat and rice to ensure MSP to farmers and at the same time keep buffer stock of foodgrains for supply through ration shops and various welfare programmes.

The country is estimated to have produced 102.54 million tonnes of rice and 90.78 million tonnes of wheat in the 2014-15 crop year (July-June), lower than 106.65 million tonnes of rice and 95.85 million tonne of wheat output in the last year.