Despite plethora of wheat in the grain markets of Haryana, the roller flour millers in the state are procuring wheat from other states to run their mills.
The apathy of the state government towards streamlining the tax structure dissuaded the local flour mills from buying the wheat from the near-by grain markets in the on going season of Rabi harvest.
About 40 roller flour mills are operational and most are utilising a quarter of their capacities due to the tax structure not conducive to their business model. The flour mills have average capacity of 100 tonnes per day.
According to president of Haryana Roller Flour Mills’ Association C P Gupta, the state has the highest rate of taxation on purchase of wheat for the private millers.
The flour mills in Haryana end up paying 12.75 per cent tax on minimum support price(MSP) of wheat, which is Rs 1,100 per quintal. This includes 2 per cent market fee, 2 per cent rural development fund, 2.5 per cent VAT, 5 per cent surcharge on VAT, 2.5 per cent kaccha arhti commission and 1 per cent pucca arhti commission. So the final cost of wheat that reaches the flour mills is about Rs 1,300 per quintal if purchased from Haryana.
At the same time, the wheat purchased from UP costs about Rs 1,140 per quintal including taxes, cost of gunny bags and freight charges.
“A difference of Rs 160 per quintal really makes a difference,” he added.
Gupta articulated that the government of Haryana was lagging behind the other northern states in implementing the scheme for the fortification of wheat flour meant for the public distribution system.