No VAT on wheat bonus for farmers

The Haryana government has decided against charging value-added tax (VAT) on the bonus of Rs 50 per quintal paid to farmers, by the Central government, for procurement of wheat.

The move would give relief to farmers in the Rabi marketing season 2006-07, a state government official said.

"The rebate of 4 per cent, Rs 2 per quintal, will result in a one-time loss of about Rs 5 crore to the state exchequer," the official said.

The decision to this effect was taken in a meeting of the state cabinet presided over by Chief Minister Bhupinder Singh Hooda here this afternoon.

The Centre has paid a bonus of Rs 50 per quintal to farmers on procurement of wheat in addition to the minimum support price of Rs 650 per quintal of wheat on condition that the state government will fully exempt the bonus amount from state taxes and levies, the source said.