AP Bureau.
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Bhubaneswar, 10 April 2015: Odisha Byabasayee Mahasangha have submitted a representation to the state government for exemption of 5% VAT on Dal, Pulses and Wheat products and instead urged for a levy of 1% Entry Tax thereon on Friday.
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The contention of the Odisha Byabasayee Mahasangha is that one adult consumes 60gm. Dal per day. Total annual consumption of Dal in Odisha is estimated at 755920MT of worth Rs.4500 crore. On their estimation, 5% VAT on this turnover comes to Rs.226 crore per annum on Dal and Pulses but State Government receive Rs.30 crore only. If 1% Entry Tax is levied instead of 5% VAT, State Government will receive excess amount of Entry Tax than VAT.
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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.
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Entry Tax and VAT will be subsumed in the proposed GST and a uniform tax rate will be in force throughout the Country. As per the recommendation of the Empowered Committee of State Finance Ministers, VAT @4% was levied on Dal, Pulses and Wheat products, that was subsequently increased to @5% w.e.f 01.04.2012.
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It is to be noted that, neighbouring States like West Bengal, Jharkhand and Chhattisgarh have not implemented the recommendation of the Empowered Committee and exempted Dal, Pulses and Wheat products from VAT.
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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.
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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.
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Meanwhile, Odisha Finance Minister has sent a missive to the Chairman of the Empowered Committee of State Finance Ministers on 10.04.2015 to convene a meeting for uniform tax rate on Dal, Pulses, Wheat products and other agriculture produces throughout country.
