FAM appeals Maha govt to abolish VAT on essential items

Mumbai, Sep 8 (UNI) The Federation of Associations of Maharashtra (FAM) has urged Maharashtra government to abolish Value Added Tax (VAT) immediately on essential Commodities like tea, wheat, rice, pulses among other things.

FAM president Mr Mohan Gurnani told mediapersons, ''If, however, the state government does not respond to traders request, the next course of agitation will be decided by the FAM action committee in a meeting of all traders from Maharashtra organised at Navi Mumbai on September 16.'' Meanwhile, the Grain, Rice&Oilseeds Merchants' Association (GROMA) President Mr Sharad Maru also stated that Maharashtra Government had proposed to impose four per cent VAT in Maharashtra on Agricultural produce such as foodgrains, pulses, oilseeds, spices and others, the essential items of mass consumption from April 1 this year.

However, considering large scale protests from the traders and people, VAT was put in abeyance for six months upto September 30, 2006 by special Administrative Relief Order.

Food, Pulses and other items have not been removed from the schedule of VAT and the Administrative Relief from levy of VAT was announced belatedly on May 1, 2006 after a lot of confusion and misunderstanding. The order granting Administrative Relief for six months exempting VAT on Foodgrains now ends on September 30, 2006.

FAM and GROMA made representations to the Maharashtra Finance Minister and conveyed views of the people and traders to remove foodgrains and pulses of mass consumption permanently from VAT or to issue notification well in advance exempting VAT on essential foodgrain items of mass consumption upto March 31, 2007. Such order be issued by September 15, 2006, Mr Maru said.

If Maharashtra State implements VAT of four per cent on foodgrains items, the traders shall have to bear additional cost vis-a-vis the neighbouring states and they will become incomepetitive against the traders of other states. The price rise shall be 20 per cent and the trade will shift from Maharashtra to other states where there is no VAT, Mr Maru added.

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