Millers meet FM over VAT

A delegation of Cotton Oil Millers' Association (COMA) met state finance minister Saurabh Patel recently in Gandhinagar on the issue of removing VAT from the Rs 2,000 crore cottonseeds and cottonseed cakes.

After VAT, four percent tax has been imposed on the raw-materials and finished products manufactured by the trade lobby. There are over 500 cotton oil mills active in the state, crushing 2,22,500 MT of cotton seeds per annum and producing edible cottonseed oil worth 800 crore and cottonseed cakes that are used as cattle feed worth Rs 1,200 crore.

"We requested the finance minister to remove VAT imposed on our trade. Prior to VAT, there was no sales tax on cottonseeds, raw-material and sales of cottonseed cakes, which is a by-product," said Praful Patel, vice- president, COMA.

Our demand is to remove VAT from cottonseed and cottonseed cakes, because yield of processed stuff comprises ratio of 12-15 per cent edible oil and 85 to 88 per cent cottonseed cakes, he said. If, tax is imposed on the raw-material, than majority of our money will be blocked.

Only 12-15 per cent of it is recovered from the sale of edible cottonseed oil and the rest 85 to 88 per cent is drained off, if same tax is not imposed on cottonseed cakes. If the state government does not remove the tax, than it should be imposed on both the items to balance our recoveries against the tax-money, however, we have urged the state finance minister to remove tax, said Rati Patel, COMA president.

However, the minister said the proposal was under consideration," Patel added.

Gujarat Kapasiya Khol Vepari Mahamandal's (GKKVM) meeting scheduled last Sunday in Rajkot has also opposed VAT on cottonseed cakes and cattlefeed.

"There is no way out but to remove VAT from cattlefeed and cottonseed cakes as food is must. Its not affordable to the end-users, who are mainly from the lowest social strata of the society," said Jaimin Thakker, GKKVM president.

With GKKVM and COMA demanding removal of VAT, there are possibilities of flaring situation between the two business consortiums.