Cotton and oilseeds traders in Maharashtra can breath easy. The State Government has decided to put on hold the 5 per cent purchase tax which was announced on these commodities in the State Budget.
The Finance Minister of Maharashtra, Mr Ajit Pawar, on Friday said that in view of the persistent demands from industry associations and farmers' representatives, the Budget announcement proposing to levy the tax would be reviewed.
The new tax was vehemently opposed by farmers in the Vidarbha region, which has seen a number of cases of cotton farmers committing suicide. Local farmers' bodies such as the Vidarbha Janandolan Samiti had launched an agitation against the tax.
Mr Pawar said in the Legislative Assembly that the State Government would also be giving a set-off on tax collected from the sale of oil cakes.
The decision to withhold the tax was taken considering the well-being of the farmers, he added.
VAT on tobacco
Mr Pawar also announced a 7.5 per cent reduction in VAT on beedis and unprocessed tobacco. In the Budget, a VAT of 12.5 per cent was levied on beedis , while 20 per cent VAT was on tobacco.
He said that the decision to reduce the tax was taken following pleas from beedi workers. The workers' representatives said that the tax could have an adverse effect on the daily wages of workers at beedi and tobacco factories.
Responding to the workers' representation, the State Government has decided to reduce the taxes with immediate effect, he announced in the Assembly.