VAT forces Gujarat wet date traders to look at new turfs
October, 12th 2006
Traders engaged in the import of wet dates, most popularly known as khajur, at Rajkot and Jamnagar would be compelled to move their business to neighbouring Maharashtra due to the value-added tax (VAT). While the Gujarat government is refusing to exempt dates from VAT, Maharashtra is not charging it at all.
Out of the total imports of dates into the country, around 55% comes through ports in Gujarat and the rest comes from those in Maharashtra according to traders. Now, importers prefer to go to Maharasthra as there is no VAT.
The total annual import of wet dates stood at around 1.1 lakh tonnes during 05-06, says Jagubhai Badiyani, vice-president of the Gujarat Wet Dates Merchants Association. Out of the total 55,000 tonnes that are imported into Gujarat, about 10% is consumed locally and the remaining quantity is sold in other states.
The traders from southern region source their requirement from traders based in Mumbai and Maharashtra. The 4% VAT on wet dates makes it dearer by Rs 800 per tonne in Gujarat compared to Maharashtra and therefore, traders from other states like Rajasthan, UP and other northern states have started purchasing khajoor from Maharashtra, says Sureshbhai Golwala, president of of the association.
This trade also offers job opportunities to hundreds of labourers engaged in loading and unloading of wet dates at various ports in Gujarat. The ports in Gujarat get around Rs 1.5 crore by way of warfage from the import of wet dates. And Municipal Corporation gets income by way of levying octroi on imported fresh food.
The Gujarat Maritime Board collects Rs 225 per tonne as warfage whereas ports in Maharashtra collect only Rs 20 per tonne. The wet date is popular among the people as it is used in all festivals be it Ramzaan, Holi or Uttarayan (kite festival).
Interestingly, wet dates did not attract sales tax till the introduction of VAT. And now it is subject to levies like 30% customs duty, CVD 4%, Port charges and octroi and thus making this commodity to be sold at Rs 17 a kg.