The Naveen Patnaik government on Monday assured the Odisha Byabasayee Mahasangha (OBM) that it would reduce value added tax from 5 per cent on pulses to 1 per cent on experimental basis.

The decision was taken at a high-level meeting attended by State Finance Minister Pradip Amat and an OBMD team.

The OBM had threatened to go on a strike if their demand of withdrawal of VAT on pulses, wheat and wheat-product was not considered.

The traders’ body, however, did not reveal anything about their next course of action following the assurance. The OBM had in the past stopped import of these products.

General body meeting

“We will discuss the government’s proposal in detail in the organisation’s general body meeting on June 1. The government’s proposal largely satisfies our demand on VAT withdrawal. However, the general body meeting will take a final call,” said OBM general secretary Sudhakar Panda.

More revenue

According to the government, the OBM had submitted a representation for exemption of 5 per cent VAT on dal, pulses and wheat products and levy of 1 per cent entry tax thereon. “The contention of the OBM is that an adult consumes 60 gm of dal per day. Total annual consumption of dal in Odisha is estimated at 7,55,920 MT worth Rs.4,500 crore. On this, 5 per cent VAT comes to Rs.226 crore per annum on dal and pulses but the State government receives Rs.30 crore only.”

“If 1 per cent entry tax is levied instead of 5 per cent VAT, the State government will receive more revenue than VAT,” traders had argued.