Mandi tax return gets to UP leather traders

Uttar Pradesh, especially the western regions of the state, has long been known as one of the largest zones for raw leather production in the country.

But over the past few years, a multitude of taxes imposed on the leather trade in the state have led to the shifting of this business to West Bengal and Chennai.

Taking note of the problems being faced by raw leather traders of Agra and nearby regions of western Uttar Pradesh, the state government had lifted the "mandi tax" on raw leather trade about 15 months back. The move had been widely praised by the state's leather traders.

But news of the re-imposition of this tax this month has shocked the leather traders who have now refused to pay this tax, which, they claim, is completely unjustified.

According to Nawab Sageer Ahmed, chairman, Raw Leather Association, the decision to lift the mandi tax on raw leather had been taken in the 110th meeting of the Mandi Parishad about 15 months back after the raw leather traders petitioned the state government for removal of the tax, citing the tough conditions that the leather traders were facing due to the multitude of taxes imposed on the trade.

He said the local Mandi Samiti had again begun demanding tax from the traders which was uncceptable to the leather traders at any cost as this tax was being illegally imposed on the trade without any orders from the state government.

He said they had complained about this "extortion" by the local Mandi Samiti to the state government but had received no reply and now, the raw leather association had decided not to pay any taxes to the Mandi Samiti till they received a formal notification for the re-imposition of the tax.

Later, talking to Business Standard, UP Mandi Samiti Deputy Director G Ram said this confusion over the mandi tax was a result of the government order regarding the re-imposition of the tax on raw leather that notified leather among the 108 articles made taxable by the state government this year.

He said trade in raw leather had never been exempted from the 2.5 per cent (including 0.5 per cent cess) Mandi Tax, but due to some confusion over the minutes of a meeting of the Mandi Samiti in which the removal of this tax had been discussed, the local Mandi Samiti in Agra had stopped taking tax from the leather traders leading the traders to believe that the tax had been lifted, when there had been no order issued in this effect by the state government.

According to Ram, the slight confusion over this issue shall be amicably settled by the Mandi Samiti with the traders soon.