Bhubaneswar, April 2: Traders across the state today agreed to withdraw their strike following talks with the state government on the issue of withdrawing Value Added Tax (VAT) on essential commodities such as dal, sugar and dal.

The government assured them that it would sympathetically consider their demands once the budget session of the Assembly drew to an end on May 26.

The traders had been on a strike from April 1 and stopped procuring the essential commodities from outside the state. As the issue flared up and the price of various products started shooting up, the state government today called an emergency meeting under the chairmanship of finance minister Pradeep Amat at the state secretariat.

Besides the finance minister, food supplies and consumer welfare minister Sanjay Das Burma and chief secretary Aditya Padhi attended the meeting. A six-member delegation led by All Odisha Traders' Association secretary Sudhakar Panda also attended the meeting.

After the meeting, the finance minister told reporters: "The demands of the traders will be examined after the current Assembly session is over on May 26. They have agreed to postpone their strike till that date and resume business from tomorrow."

The traders' association have also indicated that they would formally announce the withdrawal of the strike tomorrow. "We have a general body meeting tomorrow. We will announce the strike withdrawal decision then. The government sought time to consider our demands," said Panda.

The association demanded that like 24 states of the country, Odisha should exempt the essential commodities from VAT. "The state should follow them and simplify its tax system," Panda said.

The state is now imposing 5 per cent VAT on the essential commodities. The association argued that traders had to pay nearly 10 to 12 per cent as tax in various forms on the essential commodities. "During procurement, we bear transport cost of nearly 5 to 7 per cent. In addition to that, the traders are also paying 5 per cent VAT on these products," the association member said.

However, the state government was not in a mood to concede the demands of the traders as Odisha is passing through financial hardships. Sources in the finance department said the state government was getting nearly Rs 14,500 crore as VAT on the essential commodities. "We have to do detailed analysis before taking a decision on the issue. We need time for this and cannot jump to a conclusion right away," said an official.