The Orissa government has decided to promulgate an ordinance to impose Forest development Tax (FDT) on sale of three forest produce - kendu leaf, timber and bamboo.
The decision in this regard was taken at the meeting of the state cabinet here recently.
Though the proposal to impose such tax was mooted in March last, the necessary money bill could not be placed in the assembly necessitating the promulgation of the ordinance.
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According to state chief secretary PK Mohanty, it has been decided to impose FDT at the rate of 12 per cent for kendu leaf, four per cent for timber and one per cent for bamboo.
The levy of FDT, sources said, is an attempt to make up for the loss on sales tax on the forest produce, particularly kendu leaf in which Orissa is a leading producer.
The state government had earlier fixed sales tax at the rate of 12 per cent on kendu leaf besides the Central sales tax of four per cent.
However, the traders had moved the Orissa High Court against this decision on the ground that the state imposed sales tax cannot be collected on the commodity as the item involved inter-state trade. The court, in its order, had ruled that the tax could not be collected on kendu leaf.
The state stood to lose revenue to the tune of Rs 25 crore per annum on kendu leaf alone following the court order.
Mohanty said, the cabinet also decided to recommend to the Centre that 308 hectres of chrome ore bearing area in the Sukinda valley, which were free of litigation, should be reserved in favour of the state-owned Orissa Mining Corporation (OMC).
Though 436 hectres of chromite mining area was available in the Sukinda valley for allotment, 127 hectres had been tied up in legal tangles after two private sector ferro alloys companies had gone to court claiming 84 hectres and 43 hectres respectively from the available area.