A reportedly ‘deliberate clerical mistake’ on raising diversion tax by 250 per cent instead of 25 per cent is restricting the growth of SMEs in the Harda, Khandwa and Burhanpur districts in Western Madhya Pradesh. Even the existing units are finding it tough to survive.
The exorbitant rate is continuing despite verbal orders from the State Chief Minister Shivraj Singh Chouhan and written orders from revenue minister Kamal Patel. Harda is the hometown of the revenue minister.
On June 29, 2007, the CM had announced in an ‘Laghu Udyog Panchayat’ that the discrepancy will be removed, but officials ignored the announcement. Then the revenue minister on 25 July this year issued written instructions (a copy of which is available with Business Standard) to the Commissioner, land record, Gwalior and instructed him to rationalise the diversion tax.
In the letter, the minister said the tax rates were very high and industries were being charged Rs 37,000 per acre on an yearly basis. “The Industry cannot afford the exorbitant rate of taxes,” the letter said.
The Revenue Minister kamal Patel, Principal Secretary Revenue Department Snehlata Shrivastava, Commissioner Land Record, Vinod Kumar and Khandwa Collector SB Singh were not available for comment.
Khandwa is known for cotton ginning, processing, cotton seed crushing, oil and dal processing. The total combined turnover of Khandwa industry is approximately Rs 250 crore.
Also Read
“Diversion tax rates have gone up by 250 per cent due to a clerical mistake. The district collector had written us a letter and admitted that the diversion tax has been raised due to a clerical mistake. The state government has the will to remove the discrepancy, the chief minister and revenue minister had issued instructions in this record but officials are main hurdle in the matter. In some cases, land diversion tax exceeds prevailing land prices,” said Subhash Bansal, president BJP (Bharatiya Janata Party) District Industry Cell Khandwa, and secretary Cotton Seed Crushers Association. He had raised the issue before the state chief minister Shivraj Singh Chouhan in the Laghu Udyog Panchayat.
Tax rates vary area-wise. For example government has raised land diversion rates from 30 paise per 100 sq ft (in 1962) to Rs 16 in 1985 and Rs 83 in 1998 in Singhartalai industrial area.
Most of the units in Khandwa are seasonal in nature and are agro-based and the cotton seed sector dominates.