The Centre on Thursday directed the State Governments to exempt the bonus amount payable on wheat procured from farmers at minimum support price from the purview of value added tax (VAT) and other levies.
The Government of India has decided to give an incentive bonus of Rs 50 per quintal for procurement of wheat in 2011-12 marketing season over and above the wheat support price of Rs 1,120 per quintal, an official statement said.
This (bonus) will be subject to the condition that State Governments shall fully exempt this bonus amount from levying any State tax and levy, it said.
Over and above the minimum support price, the Centre offers bonus to farmers to enhance procurement.
The bonus of Rs 50 a quintal will be paid to wheat farmers only in the 2011-12 rabi marketing season that began from the middle of March.