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Our Bureau

Vijayawada, Feb. 4

The Solvent Extractors’ Association of India (SEAI) has opposed the reported move of the Union Government to suggest to the States to hike the floor rate of VAT from 4 per cent to 5 per cent to offset any revenue loss they may incur due to reduction in Central sales tax from 3 per cent to 2 per cent.

At a press meet here on Monday, Mr Ashok Sethia, President of SEAI, and Mr Sushil Goenka, Secretary, said that at present the States were imposing 4 per cent VAT on oilseeds and the derivatives, and “even that is too high, as the previous rates were only one or two per cent.”

They said the VAT on oilseeds should either be abolished or reduced to one per cent, deeming them essential commodities.

Further, they said, there was an urgent need to promote oil palm on a large scale in the country and in Andhra Pradesh in particular, in view of the potential of the State, and also to set up an oilseed development fund to promote the oilseeds.

There was an urgent need to declare oil palm a plantation crop, not a horticultural one, to enable companies to invest in the palm cultivation and processing, they said.

“Several Malaysian companies are eager to invest in palm cultivation in India.

“Our small farmers, with their small land holdings, are ill-equipped to grow the crop and survive in the market. Therefore, the companies should be allowed to enter the scene and they will take up the task, without marginalisng the farmers.

“Area expansion can be achieved through a mix of contract farming (for the small farmers) and captive plantations,” he explained.

They also stressed the need to increase the edible grade rice bran oil to meet the edible oil deficit and they explained the steps being taken by the SEAI for the purpose.

“There is a necessity to adopt more stringent norms in procuring rice bran for production of better grade oil. We have formulated the standards and already extractors in several States in the North have accepted them. We are sure their southern counterparts will follow suit,” they added.

Mr Rajaiah, a local solvent extractor, said quality rice bran was available in Andhra Pradesh and there would be no problem in adopting the standards.

More Stories on : Oilseeds & Edible Oil | Taxation | Andhra Pradesh

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