Odisha Sun Times Bureau
Cuttack/Bhubaneswar, Dec 9:
Around 2,200 wholesalers owing allegiance to the All Odisha Traders’ Association (AOTA) stopped import of pulses, wheat and wheat products from other states beginning today for an indefinite period protesting against 5% value added tax (VAT) imposed on these items by the state government.
The state’s main business point Malgodown in Cuttack city remained closed today.
The traders’ body has been long since demanding for introduction of a unitary tax system on food products in the state instead of the 5% VAT levied on these items in the state which are exempted in 23 states in the country.
Traders of the state had been time and again complaining against the high VAT rate on food products in the state which had led to rampant black marketing of these items by unscrupulous traders at the cost of genuine traders of the state ultimately leading to high prices as well as low revenue collection.
The Association has decided not to import suji, atta, wheat and pulses from other states beginning today for an indefinite period.
The AOTA had announced its ultimatum to the state government on November 23 with regard to its self imposed indefinite ban on import of these products.
“We have on several occasions made representations to the government urging it to do away with the tax on pulses and food grains, essential for survival. We have made our representations to the Finance minister, chief secretary, additional chief secretary, Finance and commissioner, commercial taxes in this context on several occasions. No other state has imposed tax on pulses and foodgrains. Our demand has fallen on deaf ears. Due to the government’s apathy we have decided to take the drastic step,” said Sudhakar Panda, general secretary of the Association.
The situation has led to spiraling of prices of these items and the traders are being blamed unnecessarily for it, he added.
The state consumes about 67,000 metric tonne (MT) of pulses and 12,000 MT of wheat products every month. A chunk of the consumption is imported from other states.
However, the existing flour mills of the state are catering to only 26% of the wheat and wheat products demand in the state, he alleged.
The ban on import of these items by the traders is likely to lead to an artificial crisis of these items in the state.
“We have proposed the government to impose 1% entry fee at check gates and exempt us from paying VAT this will lead to more revenue collection for the government in comparison to the revenue collected by it through imposition of high rate of 5% VAT as it will curb black marketing. We were forced to take the drastic step as we have apprised the Finance minister, chief secretary, additional chief secretary, Finance and commissioner, Commercial Taxes and Food Supplies and Consumer Welfare secretary on the matter. But it has fallen on deaf ears. We have very stock of the items which will be exhausted in a day or two. We will continue with our ban on import of these items till the government yields to our demands”, said Srikant Sahu, secretary of Chamber of Commerce at Cuttack.
“We will try to resolve the issue after discussing the matter with them. You see reducing or hiking of VAT requires the approval of the Finance department as well as the cabinet. This cannot be done within a day two. We will surely sort out the problem after holding discussions with them. Efforts are being made for a solution”, said Madhusudan Padhi secretary, Food Supplies and Consumer Welfare.