The Hindu Business Line : VAT helps coops get good price for arecanut in Bengal, Bihar

ARECANUT prices have increased by over 25 per cent since April, thanks to the introduction of value-added tax in States such as West Bengal and Bihar. Growers who are enrolled with cooperatives are now seeing an opportunity to increase market share for the white variety arecanut in these States. Prior to the implementation of VAT, cooperatives, especially in Dakshina Kannada, were not getting good demand from these States.

In the pre-VAT regime, the commodity attracted 12 per cent sales tax.Now, it is 4 per cent. Though data is not available on the quantity of arecanut sold in these States after the implementation of VAT, cooperatives in Dakshina Kannada say the demand for the commodity has increased considerably. The President of the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd, Mr L.N. Kudoor, told Business Line that the cooperative was getting good demand for white variety of arecanut from West Bengal and Bihar regions this year.

The introduction VAT in these States has helped curb the marketing of `tax-evaded' arecanut by some private traders. Cooperative sector controls around 20 per cent of the domestic arecanut market in the country. Private traders dominate the rest of the market.

"Though there were apprehensions about the implementation of VAT and its impact on arecanut market in the initial days, VAT has really helped us in getting good demand for our commodity (arecanut) in West Bengal and Bihar," he said. Campco has a depot in Kolkata.

Sources in the Mangalore Agriculturists' Souharda Sahakari (MASS) - another cooperative engaged in the marketing of arecanut - agreed that the Bihar market was positive this year for them.

Gujarat - the traditional market for the white variety of arecanut - is another State where the cooperatives want to reap benefits from VAT.

MASS, which received good demand for its retail venture in Gujarat market, wants to gain more from the proposed implementation of VAT in that State.

Sources in MASS said they had been issued with TIN (tax identification number), and there were indications that the VAT would be implemented in Gujarat in April. "This may help us improve our share in the traditional market," said an official of MASS. On Wednesday, new supari was quoted at Rs 6,300 a quintal against Rs 4,900 in April, while new supari model ruled at Rs 7,200 against Rs 5,200.

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