Citing Haryana has the highest taxes levied on Basmati paddy, exporters have sought a reduction in mandi and other assorted fees from the current 6.5 per cent to make it at par with neighbouring States so that farmers get better prices.

In a letter to State Chief Minister Manohar Lal Khattar, President of Haryana Rice Exporters Association (HREA), Sushil Jain has said that Kachi Aadhat/Dami (commission charged by commission agents), market fees and rural development cess put together make Haryana at the top in taxes compared to all other States.

Moreover, Punjab, Uttaranchal, Uttar Pradesh governments have made market fees and RD cess refundable on export. Besides, electricity rate, labour charges, and other expenses are already higher in Haryana than in nearby States, Jain pointed out.

“High rate of market fees (levied by APMC mandis) and RD cess in Haryana has become a source of corruption as it has created unhealthy competition between fees-evaders and honest businessmen. It has become difficult for an honest industrialist to compete and run their business in Haryana,” Jain said.

Post farm laws

Haryana was one of the few states that supported the Centre’s three farm laws, which were got repealed last year after being in operation for nearly 18 months. After the laws were stayed by the Supreme Court, direct purchases from farmers were happening as many States were liberal in enforcing the mandi laws. However, after the withdrawal of the laws, agriculture trading has been done only in mandis in Haryana, traders said.

Jain said Haryana increased market fees on basmati paddy from 0.5 per cent to 2 per cent with effect from June 22, 2021 and that of RD cess also to 2 per cent from 0.5 per cent from January this year. The Association has demanded market fees on Basmati paddy be cut to 1 per cent and also the RD cess to 0.50 per cent, he said.

The HREA president also said that different fees in different States are discriminatory and are against the policy of the Central government. India’s biggest tax reform — Goods and Services Tax — was introduced by the Centre with the main objective of ‘One Nation One Tax’ which suggests that everyone shall bear the same rate of taxation on the same commodity, he said.

“For same services, every State is charging different rate of market fees and cess and different rate of commission to commission agents. It is a great injustice to the farmers as their selling prices have to factor in what is the buying price of traders in other States,” said Vijay Setia, a former president of All India Rice Exporters Association and who also has a plant in Haryana.

Setia added, ”If Basmati paddy costs a trader ₹4,100 per quintal in one State, he will not buy at a higher rate from a neighbouring State and ultimately pass on the burden of higher taxes on the farmers by paying them lower.”