With the talks between the government officials and traders on waiver of value added tax on pulses, wheat and wheat products failing to reach a conclusion, the traders have decided to stick to their avowed agitation path to stop import of these food items from Thursday.
Traders claimed that meeting with the state government officials failed after the later sought more time to take a decision on the matter.
They had gone on a two-day strike in December last year, stopping import of pulses, wheat and wheat products to press for their demand for waiver of the levy. But after a written assurance from the office of the Commissioner, commercial taxes, to look into their demands, the traders had called off the strike.
"We are stopping the import of pulses, wheat and wheat products from Thursday from other states for an indefinite period as the state government has failed in their assurance to consider the waiver of five per cent VAT.
"The stock available in the market will last for a week.
"If the consumers adhere to panic buying, the foodgrain will dry up in about three days," said Sudhakar Panda, general secretary, the Federation of All Odisha Traders Association.
"After reviewing the developments for next two-three days, we will think of taking more serious steps," he added.
Twenty six states of the country have exempted VAT on pulses, wheat and wheat products.
Traders pleaded that either these items put under the one per cent VAT slab or subjected to one per cent entry tax instead of VAT, which would earn the government more revenue compared to what it is getting at the present tax rate, because of better tax compliance.
"The state government collects about Rs 30 crore (Rs 300 million) VAT from pulses against the target of Rs 225 crore (Rs 2.25 billion) as unscrupulous traders are importing the item through back channels from neighbouring states, where these items enjoy VAT exemption, without reporting the deal.
"The revenue could go up immediately to Rs 50 crore (Rs 500 million), if it is put under one per cent tax slab, as lower tax rate would be a disincentive for dishonest traders to take the risk of importing the items illegally and encourage them to report their trade," Panda said.
Reacting to the trader's call, Madhusdan Padhi, secretary, Food Supplies and Consumer Welfare department said, "We have written to the Collectors to keep a close watch on the situation and also to conduct raids on the hoarders."
Consumption of pulses in the state stands at about 0.9 million tonne per year with a business turnover of about Rs 4,500 crore (Rs 45 billion).
Odisha produces less than 10 per cent of its total demand.
Similarly, the monthly demand of wheat and wheat products in Odisha is estimated at 1.2 million tonne while the output is pegged at 0.35 million tonne.
"We will go with the decision of FAOTA to stop import of pulses, wheat and wheat products, but will keep our counters open," said Cuttack Chamber of Commerce joint secretary. Srikant Sahoo.
