The Hindu Business Line : FAPCCI seeks removal of sales tax on foodgrains

Hyderabad, April 27 The Federation of Andhra Pradesh Chambers of Commerce and Industry ( FAPCCI) requested the State to exempt the food grains from sales tax in line with the practice in some other developed States in the country.

In a representation to the Chief Minster, Dr Y.S. Rajasekhara Reddy, FAPCCI said due to levy of tax in Andhra Pradesh (in the absence of tax in neighbouring States), the food processing industry in the State was unable to progress as any value addition or processing was resulting in escalation of prices as well as taxes rendering the industry uncompetitive.

Bringing the attention of the Chief Minister to a recommendation by a Group of Ministers, constituted by the State, that the sales tax should be removed on food grains, the industry body said at the time of introduction of value added tax in the State it had sought removal of sales tax on food grains in vain.

“In view of the very comfortable growth of sales tax revenues in the recent past, we are confident that foregoing less than Rs 500 crore by abolishing sales tax on food grains is not going to impact State revenues,” it said.

The tax loss, if any, would be offset by the development of food processing industry which would lead to more employment generation and better price realisation for the farmers, it added.

More Stories on : Taxation | Industry Associations | Foodgrains | Andhra Pradesh

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