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VAT waived, but no price relief
July, 01st 2009

The state may have withdrawn the four per cent value-added tax (VAT) on foodgrain, potatoes and onions, but the consumers hardly stand to gain anything from the decision.

In fact, the prices of onions and potatoes have shot up in the past ten days after the withdrawal of VAT on June 19.

While the wholesale price of onions today stood at Rs 10 per kg, potatoes were selling at Rs 12.40 per kg. The retail prices are even more. Potatoes cost Rs 15-16 per kg in retail shops and onions Rs 13-14 per kg.

Ironically, the prices of these essential food items were lesser when the state had slapped VAT on them. Then, potatoes and onions cost around Rs 11 and Rs 9.50, respectively, in the wholesale market and Rs 14 and Rs 12, respectively, in the retail market.

This despite the fact that there is a steady supply of these vegetables into Jharkhand markets. But businessmen, who had earlier cited VAT as the reason behind the spurt in prices of potatoes and onions, disagree. The prices of these goods have marginally gone up because of scarcity in the market, said Aftab Aslam, a wholesaler of potatoes and onions. He added that they had to pay the Bazar Samiti a tax of at least Rs 10 per packet of onions and potatoes. This collection increases the final price. Besides, there are some hidden expenses too, he argued.

Federation of Jharkhand Chamber of Commerce and Industries (FJCCI), which had hit the protest path to press for withdrawal of VAT, is now shying away from playing any role to bring down the prices.

We can at the most ask the shopkeepers to reduce the prices and we have done so. We cannot sell potatoes and onions, said FJCCI president Anchal Kinger.

 
 
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