BHUBANESWAR: Traders, particularly those dealing with food grains like wheat and its products, pulses, grams and legumes, are up in arms against Government inaction over withdrawal of VAT on the commodities.
The All Odisha Byabasayee Mahasangha on Friday set August 31 as the deadline for the Government to make an announcement in this regard. If the Government fails to do so, the traders will be compelled to launch a State-wide stir, the traders’ body warned.
General secretary of the Mahasangha Sudhakar Panda alleged that five per cent VAT on essential commodities like wheat, Atta, Maida and Sooji along with all kinds of pulses and legumes was arbitrary and against the principles of uniformity of taxes. While more than 23 States in the country including the neighbouring ones had exempted these items from VAT, Odisha continued with the taxation in detriment to business as well as interest of the consumers.
The Government alibi of loss in revenue for continuing the tax is not true. The consumption of wheat and its products is around 3.5 lakh tonne per year while pulses account for nine lakh tonne. The average value of business is to the tune of `4,500 crore. Considering the five per cent VAT, tax generation should be in the range of `225 crore but actual collection is only around `30 crore for various reasons.
“If the Government imposes one per cent entry tax in place of VAT, the collections will go up to `50 crore. For, there would be no evasion as the State is majorly dependant on imports of products to meet the demand,” Panda told mediapersons here.
The VAT has also taken a heavy toll on domestic enterprise as wheat products like Atta, Maida and Sooji have become costly in the State. While there is no tax in other States, particularly the neighbouring ones, the commodities are sneaked in. As a result, a major chunk of the flour mills in Odisha has either downed shutters or is on the verge of closure. Of around 50 mills, only 20 are functioning.
“We have been taking up the matter with the Government. If no decision is taken soon, we will be forced to chalk out our next course of action,” Panda added.