"In exercise of the powers conferred by sub section(5) of section 8 of the Central Sales Tax Act, 1956 (74 of 1956) , the state government, having been satisfied that it is necessary so to do in the public interest, do here by direct that the tax on sale of rice to a registered dealer in course of interstate trade or commerce by a dealer, having his place of business in the state of Odisha, shall be exempted to the conditions of production of declaration in Form C prescribed under the Central Sales Tax (registration and turnover ) rules, 1957 obtained from the purchasing dealer", read a state finance department notification. Rice millers say, the waiver of the levy will boost the trade of surplus rice in a transparent manner.
"Neighbouring states like West Bengal, Chhattisgarh, Jharkhand and Bihar have already allowed free trade of rice. Odisha being a rice surplus state, now trader can sale the surplus rice to the registered dealers through fair means," said Shyamlal Agarwal, President, All Odisha Rice Miller Association.
Also Read
With this exemption, the traders will be able to compete with the rivals in other states, he added.
Traders peg the state's rice consumption at 2.2 million tonne. In 2013-14, the state government had procured a little above 2.8 million tonne of rice.
Due to the prevalent tax structure, surplus produce could not be moved out of the state, compelling the state government to procure more than its consumption capacity. Inadequate storage capacity further compounded the problems for the government.
The state government, in Kharif 2014, aims to procure 8.46 million tonne of rice with a yield of 2,350 kg per hectare.