The Federation of All Odisha Traders Association (FAOTA) today termed the state government's decision to continue levy of value added tax (VAT) on pulses and wheat products as a "one-sided decision not in the interest of the consumers".
"As traders, we take pride in serving our consumers. We do not understand the government's one-sided press note which ignores interest of lakhs of consumers and is dictated by a few bureaucrats," FAOTA said in a statement today.
The FAOTA has stopped import of pulses, wheat and wheat products from other states since April 9 demanding waiver of 5 per cent VAT. They have pleaded for bringing down the levy rate on these items to one per cent slab.
With both sides not budging from their stand, the talks between the association and the government last week did not yield any result.
Instead the government has declared to import the food items and stock it up to meet any shortage in supply. Food Supplies and Consumer Welfare Minister Sanjay Dasburma said, the state government will prepare an action plan for two months to meet the situation arising out of the traders' strike. In the first phase, the government would float tenders for procurement of 10,000 tonne of pulses which would be made available to general public through 20,000 Public Distribution System (PDS) outlets.
In order to keep a check on hoarding and black-marketing of pulses and wheat products, the minister said, all district collectors have been directed to keep a tab on black marketers and hoarders, besides tightening the enforcement measures. The state government has rejected the request of the traders' association saying that it cannot impose one per cent entry tax in lieu of VAT on agricultural items due to legal hurdles. It also said, it cannot reduce VAT on these items as it was decided by a panel of empowered committee of state finance ministers.
Annually, the state collects VAT of around Rs 400 crore from dal, pulses and other agricultural products, out of which dal and pulses account for only Rs 40 crore revenue. Almost 90 per cent of food items of the state are imported from other states, and the local consumers pay around 15 per cent more than neighbouring states to compensate transportation cost and VAT. FAOTA said, since VAT on agricultural products is not collected in 24 states, Odisha should follow suit.