The Madhya Pradesh Department of Commercial Tax has issued notices to 29 entities asking them to provide evidence of purchase of organic cotton, yarn and soyabean from farmers in the State.

Details have been sought from the 2017-18 fiscal, when the goods and services tax (GST) was implemented and information has been sought on payment of GST for commercial transactions of these organic produce. 

In a notice issued a month ago, the department asked these entities to produce relevant records such as transaction certificates issued by certification bodies, agreements with growers, scope certificate — a written assurance that norms have been followed from a certification body, farmers’ reports and rejection reports.

‘Power to call for info’

The department asked these entities to produce details of farmers and identity of farms. It justified its notification based on the GST rules that provides “power to call for information”. 

The department has sought these details based on a detailed probe and information gathered from farmers. It has sought test reports of these organic produce, too.

 According to sources, the notices have been issued based on a probe report filed by the Khargone district collector. 

The Agricultural and Processed Food Products Export Development Agency (APEDA), the nodal agency monitoring organic farming and exports in the country, had requested  the Madhya Pradesh government a couple of months ago to look into allegations of irregularities in organic farming and certification.

Farmers unaware

The action assumes significance in the wake of Chennai-based Sri Sri Sri Swamy Vivekananda Trust (SSVT) writing to Prime Minister Narendra Modi alleging “various irregularities” in the organic certification.  

Some of the irregularities alleged are farmers being enrolled in organic groups without being aware or being informed. The trust had in January urged the Prime Minister to revamp the process of providing accreditation to organic produce. 

Among buying nations, Bangladesh had complained that there were irregularities in the organic cotton it imported from India. Last year, APEDA told a certification agency that norms for organic farming were not being followed with farmers even using chemicals.

In the third week of February, the Commerce Ministry wrote to SSVT saying that the Centre will adopt additional measures to check irregularities in organic farming. 

Two issues

“There are two issues to the MP Department of Commercial Tax issuing notices to these entities. One, it will ensure farmers get a premium for the organic produce if they have followed the process and are part of an organic farmers group. Two, it will help the exchequer to earn a good amount as revenue,” a trading source said on condition of anonymity. 

Sources said some of these entities would have procured only one tonne of organic cotton from a farmer but would have claimed to have purchased more.

“It is a proactive move to ensure farmers get their due and government its revenue,” the source said. The sale of organic produce in which illegalities have reportedly been committed might run into tens of thousands of crore rupee. The Centre might stand to gain a few thousands of crores as revenue in view of the MP tax department’s action. 

‘Organic aadhaar’

“Actually, the notice will now reveal if these entities have bought normal cotton from the agricultural produce marketing committee (APMC) yards and labelled them as organic. It is a sort of due diligence being carried out,” the source said.

Trade sources do not discount other Central agencies now stepping in to check the irregularities since foreign transactions are involved.

Meanwhile, SSVT in another letter to Modi, urged for the introduction of organic aadhaar for identification of organic farmers that will be based on personal aadhar and unique land parcel identification number. This will become a foundation for the integrity of India’s organic agriculture, it said.