By Bizodisha Bureau, Bhubaneswar, April 11, 2015 :

Traders and government in Odisha seems to be at loggerhead with the latter deciding to procure 10,000 ton of pulses from open market through Odisha Civil Supply Corporation to meet the demand.

Odisha Byabasayee Mahasangha has stopped purchasing Pulses and Wheat products from other States demanding exemption of five per cent value added tax [VAT] on Dal, Pulses and Wheat products and levy of 1% Entry Tax thereon.

The state government has been contending that there is no entry tax on agriculture produces at present.

“As the constitutional validity of the Entry Tax is challenged and pending before the constitutional bench of the Hon’ble Supreme Court and the State have filed affidavit to maintain status-quo. Entry tax cannot be levied on Dal and pulses at this Stage”, officials said.

As per the recommendation of the Empowered Committee of State Finance Ministers, VAT @4% has been levied on Dal, Pulses and Wheat products. Again on the recommendation of the Empowered Committee, VAT @5% instead of 4% has been levied since April 1, 2012.

The neighbouring States like West Bengal, Jharkhand and Chhattisgarh have not implemented the recommendation of the Empowered Committee and exempted Dal, Pulses and Wheat products which resulting in the alleged trade diversion.

“Annually around VAT of Rs.400 crore is being collected in Odisha from Dal, Pulses and other agricultural products. So in the present scenario any exemption on the tax rate of Dal, Pulses and Wheat products will result in less collection of revenue for the State. The State will also get less compensation from Government of India in this regard”, a government statement said.

The 122nd Constitution Amendment Bill for GST has been introduced in Lok Sabha. Government of India will compensate the tax loss for five years for any amount of tax loss by the State Government due to implementation of the GST. If GST is introduced from April 2016 then 2015-16 will the base year for defraying of compensation to the State on account of tax loss.

Meanwhile, the state finance minster Pradip Amat has written a letter to the Chairman of the Empowered Committee of State Finance Minister to convene a meeting for uniform tax rate on Dal, Pulses, Wheat products and other agriculture produces throughout country.

Amat has urged the Odisha Byabasayee Mahasangha to withdraw the stoppage of purchase of Dal, Pulses and Wheat products from other States in the interest of the consumers of the State.