After textile traders, the sugar dealers in the State have now begun to get restive over the delay in withdrawal of Value-Added Tax (VAT) imposed on the commodity by the Government. Like their counterparts in textiles and garments business, the sugar dealers have also threatened to take to the streets if the dilly-dallying over VAT continues to persist. The traders have been opposing 4 per cent VAT imposed on sugar by the Government. They have complained that it was contrary to the principle of uniformity of taxes in the country, as professed by VAT.
No other State in the country has imposed VAT on sugar, as it is an essential commodity. Besides, sugar as a commodity already invokes an entry tax of 1 per cent in the State. With the addition of 4 per cent VAT, the tax burden would increase to 5 per cent.
There would be an impact on consumers as prices would be jacked up substantially. The prices would go up by at least ` 2-3 in the retail market, Federation of All-Orissa Traders Association secretary B K Mohanty said.
Orissa requires about 60 lakh tonnes of sugar every month and the bulk of it is imported from Andhra Pradesh, Karnataka, Tamil Nadu and Maharashtra. Only around 15 per cent of requirement is produced locally by around 6 sugar mills in the State. The fallout of taxation would also lead to illicit channelling of sugar from the neighbouring States, causing loss of revenue to the Government, Mohanty said.
The traders body had submitted a memorandum to Chief Minister Naveen Patnaik in May and also met the Secretary of Finance department over the issue. The Government had taken the plea of the absence of the Finance Minister and sought more time for its withdrawal. The Minister has returned and we expect immediate action now. If it doesnt happen, we will be forced to take drastic measures, the sugar traders said.