The Samajwadi Party has failed to keep its poll promise — of lowering value added tax (VAT) on fertilisers. Farmers of UP are, therefore, shelling out more money than their counterparts in adjoining states for common fertilisers like urea and phosphates.
In its poll manifesto, the SP had promised that tax rates, which are on a higher side in comparison to adjoining states as Punjab, Haryana, Rajasthan, Madhya Pradesh and Bihar, will be made equivalent with other states.
In the case of fertilisers, UP has one of the highest VAT structures in the country. It levies 4 per cent VAT on urea, which is heavily used by farmers as a source of nitrogen. At present, a bag of urea weighing 50 kg costs Rs 311.50 in the state. The same costs Rs 270-275 in Haryana, Delhi and Punjab.
"The lower price in these adjoining states is due to nil VAT structure. UP has one of the highest VAT structures on urea," Sanjeev Aggrawal, general secretary, UP Fertilisers Dealers' Association said.
Similar is the case with another common fertiliser, phosphates, in the states. There is a difference of nearly Rs 50-70 per bag between UP and adjoining states. Since phosphates is a decontrolled fertiliser, its rate has jumped from Rs 600 per bag to Rs 1,200 per bag in a span of 18 months. There was a rate revision of eight times for phosphates. At present, a bag of 50 kg phosphates costs Rs 1,175 in the state. UP charges a VAT of 4 percent on phosphates.
"We have met the officials of commercial tax department several times. Nothing has been done," Aggrawal said
Agriculture minister Raja Anand Singh ruled out any reduction in VAT on fertiliser. "There is no such proposal to reduce VAT," he said. When reminded about his party's poll promise, he said: "We are committed to our poll manifesto. But no initiative has been taken yet."
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