Traders refuse to deal wheat products, pulses

Traders at Cuttack's Malgodown, the biggest wholesale market of Odisha today threatened to stop trade in wheat products like flour, suji, maida and all varieties of pulses saying these items invite an exorbitant five per cent VAT in the state.
These products do not invite VAT in neighbouring and many other states of the country, they claim.
"Demanding withdrawal of VAT on wheat products and pulses, we have submitted several memoranda to the state government. Since the government was non-committal to our demands, we had given an ultimatum to stop trading in these products from tomorrow," said Srikant Sahu, the joint secretary of traders association here.

Accordingly, all the chambers of commerce across the state had been informed about it, Sahu said, adding no trader would order for these products or sell them until VAT is removed from wheat products and pulses.
Odisha is a major consuming state in terms of wheat products and pulses. Out of nearly nine lakh tonnes of these products consumed in the State, Odisha produces only ten per cent of its demand, sources said, adding that the annual business turnover of these products crosses Rs 4,500 crore.
"The 5 per cent VAT on these products in the State results in price difference of Rs 300 per quintal in comparison to neighbouring states," said a pulses trader, adding the arbitrary VAT imposition has given way to unfair trade practices as a result against a revenue target of Rs 225 cr, the government ends up collecting a meagre Rs 30 crore.

On the other hand, the traders suggest that the government would benefit considering imposition of only one per cent entry tax on these products and do away with VAT burden like in 23 other states.