A value-added tax (VAT) being imposed on wheat products in Telangana is causing concern to the millers as they fear that the levy, which has already dented their competitiveness, might force them to shut shop as well.
One of the few States where wheat products – Atta, maida, and sooji/rava – attract VAT, the impact of the levy is evident in the substantial exports coming in from Maharashtra and Karnataka, according to Telangana Roller Flour Mills Association leaders.
With the two States not levying VAT, the wheat products, which serve as raw material for a host of items, including biscuits and noodles, the 30 mills in Telangana are operating below their capacity.
A chunk of the State’s annual requirement of 2 million tonnes of wheat products is coming from across its borders.
The story of the six mills in Andhra Pradesh, the president Dundoo Vinod Kumar and vice president Jitender Gupta said, is no different as that State also levied VAT on the products.
Stating that there has been no response to an appeal made the Telangana government last August, they said wheat products are poor man’s food. The revenue accruing from the levy to the State is also not substantial, Mr.Gupta said.
The Association leaders were speaking on the sidelines of a milling conference here on Thursday.
If the demand fall, the millers, Mr. Kumar said, would have to close shop.
This, Mr. Gupta added, would affect about 15,000 persons dependent on them for a livelihood.
At another level, the millers are also worried about the impact the proposed Goods and Services Tax would have on the consumer price of the products. Under the GST, the wheat products are proposed to attract a tax, which the Centre should refrain from doing so.