|Traders protest against the VAT hike. File picture
Cuttack, April 1: Traders across the state have called off their agitation against the imposition of value added tax (VAT), as part of which they had threatened to stop procurement of essential commodities.
This came after the state government deferred its decision last night to levy VAT on sugar and textile products following stiff opposition from the traders’ community.
State finance minister Prafulla Ghadei announced in the Assembly last night that both sugar and textile products would be kept out of the VAT hike for the time being.
“We have postponed our decision to stop the procurement of essential commodities. We have already started ordering for food products from today,” said Odisha Byabasahi Mahasangha secretary Sudhakar Panda.
Earlier, the traders under the aegis of Mahasangh had threatened to stop the procurement of essential commodities from the midnight of March 31.
The Mahasangha along with All Odisha Textile Merchant Association was protesting against the imposition of 5 per cent VAT on sugar and textile products from April 1.
Traders said the decision to impose a 5 per cent VAT would result in a kilogram of sugar going up by anything between Rs 2 and Rs 3. At present, the cost of sugar is Rs 3,100 a quintal and the retail cost varies between Rs 35 and 37 a kg.
Panda said the state government had decided to increase the VAT on foodgrains from the existing 4 per cent to 5 per cent at a time when no tax is levied on foodgrains in 22 states.
“We are not against VAT but there should be an uniform tax system across the country. We will soon submit a memorandum to the state government to press for zero per cent tax on foodgrains,” he said.
Sources said that the traders had already stopped the procurement of food items from March 26 from all the dispatching points. Moreover, the stocks at Malgodown, the largest wholesale market in the state, were sufficient to meet the food requirement for a week only.
On March 29, the state government’s decision to impose 5 per cent VAT caused uproar in the Assembly with the Opposition demanding its immediate rollback.
On March 30, textile traders of the state protested in front of the Assembly against the imposition of VAT. Nearly 2,000 textile traders took out a rally and submitted a memorandum to the chief minister seeking withdrawal of the VAT. All textile traders across the state downed their shutters. Nearly, seven lakh traders, including 1,500 from Cuttack, had closed their business establishments demanding rollback of the state government’s decision. Also, 3,500 registered unions of textile retailers across the state kept their business establishments shut.