Centre tells states to exempt pulses from VAT to check price rise

With prices of pulses on the rise, the Centre asked state governments to exempt commodity from VAT and local taxes besides acting against hoarders.

The Centre also said it was keeping a watch on price of sugar, which was around Rs 40 a kg, and would not hesitate to cut down import duty and ban exports if prices rise further.

At a meeting of state food ministers, Union Food Minister Ramvilas Paswan said exempting pulses from VAT and other local taxes would lead to a five to seven per cent decline in its retail prices.

Paswan also wanted the state governments to set up their own Price Stabilisation Fund that could be utilised to check prices of pulses and other essential commodities.

The average price at 93 centres across the country for urad was Rs 170 a kg, while tur was retailing at Rs 140 a kg and gram at Rs 70 a kg.

On rising sugar prices, the minister said the current price – Rs 40 a kg – was justified as its production cost was Rs 32-33 a kg.

“If prices increase from the existing level, we will also look at the option of lowering import duty and banning exports,” Paswan said.

Rs 23 last year
Last year, mills were selling sugar at Rs 22-23 a kg, which was much below the production cost due to excess stocks. This led to millers running up arrears of up to Rs 21,000 crore.

Paswan said that with rise in sugar prices and steps taken by the government, outstanding dues by millers to farmers has declined to Rs 800 crore.

Paswan also said that he has written to governments of Karnataka, Maharashtra, Uttar Pradesh, and Tamil Nadu to keep a close watch on sugar stocks held by millers to ensure availability in the domestic market.