State will have to eventually come under the VAT regime, says Finance Minister
MUMBAI: Here’s a grain of truth. Essential commodities, especially grains and pulses, will get dearer from October 1.
Finance Minister Jayant Patil has indicated that the state will have to bring in the value-added tax (VAT) regime in Maharashtra.
“I will try to put VAT on hold until all major states in the country implement it. But, financially, it is not in the interest of the state to stay away from VAT,” Patil said while interacting with traders at the Mumbai Agriculture Produce Marketing Committee (APMC) premises in Vashi. The traders have been pressing for a comprehensive VAT system.
The state government had postponed the implementation of four per cent VAT until September 31 following an indefinite stir by APMC traders when it was imposed last month. The government had earlier deferred VAT until March 31. Patil said Maharashtra markets had lost over Rs2,000 crore due to the traders’ strike.
The prices of essential commodities, especially grains and pulses, in Navi Mumbai’s retail and wholesale markets had gone up marginally following the levy of four per cent VAT between April 1 and April 30.
Sharad Maru, president of Grain Market Association, said the wholesale price of wheat from Rajasthan, which cost up to Rs1,000 per quintal would touch Rs1,084 per quintal once VAT is levied.
Even in the case of high quality rice, the price would go up by Rs100 per quintal from Rs1,300, he said. VAT would also trigger an increase in prices of other grains, edible oils and pulses by one to two rupees per kilo, he added.
Maru contended that since Gujarat, Karnataka and Madhya Pradesh ha given relaxation in VAT, most stocks would get diverted to the Kandla port in Gujarat and markets in MP and Karnataka thus affecting the overall trade in Maharashtra.
“The state government has not come clear on the policies adopted in imposing VAT and the way it will be calculated. This uncertain picture upsets the trading activities. In many states, VAT is implemented but they have abolished other small taxes which are still levied in Maharashtra,” Ashok Kiri of the association said.
Maru said traders were not against VAT, but wanted it to be more comprehensive and uniform, as found in other progressive countries.
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