Seeks tax settlement.
Though India is the second largest producer of rice, next only to China, the rice bran oil industry in the country is facing shortage of raw-material — paddy. Besides, the industry in Andhra Pradesh is bogged down by a 10 per cent tax imposed by the commercial taxes department on all the extraction units.
“We are able to withstand the problem related to raw material, but the one with the commercial taxes department is too hard to handle. We have already represented the issue to the state government,” said M Rajaiah, president of Andhra Pradesh Solvent Extractors Association.
The country, given its paddy production capacity, has the potential to produce 1 million tonne rice bran oil annually, but the actual production is only 600,000 tonne.
According to the industry estimate, this year 830,000 tonne rice bran oil is likely to be produced as against 800,000 tonne during 2009-10. During 2009-10, the country produced 780,000 tonnes of edible and 20,000 tonne non-edible rice bran oil and this year, the the production is estimated to be 800,000 tonne edible and 30,000 tonne non-edible rice bran oil.
“There is potential to produce more rice bran oil, which is good for health. But due to the non availability of raw material, we are facing problems and have represented our issue to the government,” he said.
Rajaiah said the 56 rice bran extraction units in Andhra Pradesh had tied up with oil manufacturers of Tamil Nadu, Puducherry and Karnataka in 2001-02 as the prices in there state were not remunerative. The tie-up was made with the consignment agents in the respective states as mediators.
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However, these consignment agents had duped the Commercial Taxes department by avoiding tax, which had made the department to impose a 10 per cent tax on all the extraction units in the state.
“The penalty has become a burden on us. Even as the industry is facing the problem of shortage of raw material, the taxes and penal taxes have pushed the industry on the verge of closure,” Rajaiah, who heads Vijaya Agro in Vijayawada, said.