State exempts CST on inter-state trade of paddy

After being cornered by the opposition parties time and again on allegations of distress sale of paddy, the state government has finally waived off the two per cent CST (central sales tax) on the interstate trade of paddy for four months.

"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 paddy to a registered dealer in the course of interstate trade or commerce by a dealer, having his place of business in the state of Odisha, shall be exempted from levy of tax subject to the conditions of production in Form 'C' prescribed under the Central Sales Tax (registration and turnover) Rules, 1957 obtained from the purchasing dealer during the period from 1st January 2014 to 30th April 2014," read a finance department notification.

The notification of the state finance government follows Chief Minister Naveen Patnaik's announcement in this regard at a rally in Bargarh district last month.

"The government has decided to wave two per cent market fee and two per cent CST on movement of paddy so that the farmers can get a higher rate for their produce, "Patnaik had said in Bargarh.

Bowing to the demands of various farmer associations and political parties, the state government had announced a bonus of Rs 100 per quintal of paddy for farmers affected by Cyclone Phailin and the subsequent floods that struck the state in October this year. The bonus will be paid over and above the minimum support price. The expenditure for this will be totally borne by the state government.

The Centre has fixed minimum support price (MSP) of paddy at Rs 1,250 per quintal for the 2012-13 kharif as against Rs 1,080 in the previous year. For A-grade variety, the support price has been raised to Rs 1,280 per quintal from Rs 1,110.

Navnirman Krushak Sangathan, a farmers' association which was demanding Rs 500 bonus for a quintal of paddy, had blocked the carcade of the chief minister near secretariat here recently to put pressure on the government to fulfil their demand.

"The exemption of the levy will lead to free movement of the commodity to other states benefiting the farmers of the state," said Ramesh Mohapatra, President, Utkal Chamber of Commerce and Industry.

Officials in the finance department maintained that due to bumper crop production on the backdrop of even distribution of rain fall in the last monsoon, the levy is exempted for the farmers to get better realisation.