Prafulla Ghadei presenting the state budget that levied 5 per cent VAT on sugar and textile goods. Telegraph picture

Bhubaneswar/Cuttack, March 29: In the season of rollbacks, Odisha’s MLAs want their pound of flesh.

The state government’s move to impose 5 per cent value added tax (VAT) on essential commodities, including sugar and textile products, from April 1 caused an uproar in the Assembly today with the Opposition demanding its immediate rollback.

Only recently, Bengal chief minister Mamata Banerjee’s wrath over railway fare hike not only cost the minister his chair, but also his successor ensured rollback on Didi’s lines.

Though Opposition members in Odisha do not demand the minister’s scalp, they want a rollback because they feel that the consumers would be facing a tough time as sugar and cloth merchants in the state had threatened to go on strike and stop procurement of these items from outside the state from March 31.

Odisha, which is not a major sugar producing state and does not have big textile mills, depends on other states to meet the demands for these products.

“Unscrupulous traders will take advantage of the strike and hoard essential commodities. Besides, the neighbouring states will earn more revenue as traders in bordering districts will procure these goods from there,” said Congress chief whip Prasad Harichandan.

Most of the states were not levying VAT on essential commodities such as sugar and textile products, he said.

The 2012-13 budget, which was presented in the Assembly on February 24, had proposed five per cent VAT on sugar and textile products in the state.

The traders, under the aegis of Odisha Byabasahi Mahasangha, have threatened to stop procurement of essential commodities, including sugar, from March 31. They will also take out a rally in the state capital tomorrow to demand rollback of the government move. “Imposition of five per cent VAT will cause revenue loss to the state exchequer and affect the livelihoods of the traders as well,” said joint secretary of the Cuttack Chamber of Commerce Srikant Sahu.

Similarly, nearly 7 lakh textile traders under the aegis of All Odisha Textile Merchants’ Association will down their shutters tomorrow in protest against the decision to impose five per cent VAT on textile products. The decision to stop the import of essential commodities, particularly from Cuttack Malgodown, the largest wholesale business centre in the state with around 400 traders, is likely to affect consumers across the state.

Nearly 25,000 quintals of sugar is procured from neighbouring states every month, which hardly meets the requirement for a week. The new tax will make sugar costlier by Rs 2 to Rs 3 per kilogram as the traders will pass the burden onto consumers.

Textile merchants fear that imposition of VAT would push up the cost of textiles in the state by 20 per cent. Besides the VAT, they are also required to pay the existing two per cent entry tax.

“This will affect our business, as consumers will prefer to buy textile fabrics and readymade garments from neighbouring states such as Jharkhand and Bengal because they do not have entry tax on textile goods. Even Andhra Pradesh does not have an entry tax on textile products,” said All Odisha Textile Merchants’ Association general secretary Mohanlal Jain.

Last year, the state government had announced the imposition of a four per cent VAT on textiles and an additional four per cent entry tax. But it withdrew its order following protests by traders.