Our Bureau

Guntur, March 18

THE decision of the commercial tax authorities to review the sales assessments of turmeric and chilli merchants and collect tax on exports for previous years has led to a crisis in both the markets, with the turmeric merchants already stalling transactions at the Duggirala marketyard and the chilli merchants giving the boycott call from Monday.

Chilli merchants at the marketyard here - the biggest in the State - have urged farmers not to bring the produce to the yard from Monday, as they plan to stay away from the market.

Both the markets are in a crisis as the prices have slumped to Rs 2,000 per quintal and the farmers are seeking market intervention through the State Markfed and the Nafed, a plea which has not so far evoked any positive response from the Government. The market boycott call is likely to depress prices further.

Mr V. Varmal, President of the Chilli Export Merchants' Association, said in the past exports had been exempted from payment of tax and the merchants used to produce Form H and seek exemption. "Therefore, it is highly unreasonable on the part of the authorities to reopen the returns for the past years and ask us to pay up the arrears.

Notices have been slapped on several traders and we cannot continue the trade any longer in these circumstances. Left with no alternative, we have decided to stay away from the markets," he said.

In a similar vein, Mr J. Krishna Rao, of Turmeric Merchants' Association at Duggirala, said the Government had granted exemption to exports and several courts had also upheld their contention that no tax need be paid.

"It is unfortunate that the commercial tax authorities are striking such a stance. It will accentuate the market crisis and hit both the merchants and farmers. For the past week, there are no transactions at Duggirala and from Monday the merchants at other yards will also join us," he said and urged the Government to find a solution expeditiously.

(This article was published in the Business Line print edition dated March 19, 2005)
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