The Hindu Business Line : VAT row: Kerala traders not to buy chicken

POULTRY traders in Kerala have decided not to buy chicken from Tamil Nadu until the Kerala Government reviews its decision to impose a 12.5 per cent value-added tax (VAT) on live birds.

"It is not economical for us to pay that kind of tax. We will not lift chicken from Tamil Nadu," said Mr P.K. Kunhion, President of All Kerala Chicken Merchants and Commission Agents Association, after a meeting with the Kerala Chief Minister and Government officials.

The traders are protesting the decision to bring live chicken under the 12.5 per cent VAT in Kerala, saying that no other State has taxed this item under the new tax regime that was adopted from April 1.

Mr Kunhion said the Chief Minister had assured them to look into the matter and forwarded a letter to the Finance Ministry. Officials in the Ministry would study the matter in a week's time, the association was told.

However, he said the association has decided to continue staying away from importing chicken from Tamil Nadu till the issue is settled.

Kerala buys about 15-20 lakh live chicken every week from Tamil Nadu.

Poultry industry in Tamil Nadu has been affected by the decision of Kerala traders to abstain from the market.

The traders will meet in Palakkad on Friday to consider these issues.

Meanwhile, shortage of chicken in the market has led to prices shooting up in the State over the past few days. Retail shops are selling chicken at Rs 48-50 a kg while at the wholesale level, the price hovers around Rs 44 a kg (for live birds).

During the last week of March, the wholesale prices ruled between Rs 32-35 a kg.

In northern districts of Kerala, the shortage is more acute and, hence, the prices rule at even higher levels, Mr Kunhion said.

"Consumption will fall drastically because of this price increase. When prices touched Rs 50 a kg in the past, we have seen consumption declining by at least 30 per cent," a trader said.

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