Traders and chambers of commerce in Jharkhand are unhappy over some of the new provisions in the agriculture produce marketing committee (APMC) Act, even before it has come into effect.
The imposition of 2% single-point tax on all agricultural produce, replacing the existing multi-point 1% tax at every transaction stage, has drawn controversy.
After being in limbo for almost a year, the state assembly finally passed the amended APMC act on March 26, 2008, after the ratification of the new provisions by a select committee. It now waiting for the governor’s approval to become a law.
According to Suresh Sonthalia, vice-president, Singhbhum Chamber of Commerce & Industry (SCC&I): “If agriculture-based Bihar has abolished the tax, how can Jharkhand, instead of abolishing it, hike the rate from 1 to 2%.”
The state agriculture & sugarcane development secretary AK Sarkar, however, says there is a “misconception” about the whole issue. The 2% tax will be a one-time tax to be levied while the department was at present charging 1% at every stage, which sometimes was resulting in a tax collection of “at least 2% or even more than that.”
Speaking to FE over phone from Ranchi, Sarkar said: “Since the 2% tax is a one-time levy, it is actually a reduction and not an increase.”
“Even the 1% tax is being evaded today by greasing palms; who is going to pay the enhanced rate,” said a trader. According to him, the ‘bazaar samitis/mandis’ were breeding grounds of corruption that hardly ever spent anything towards either infrastructure building or towards the welfare of those using the facilities.
However, Sonthalia thinks the consumers will be the ultimate sufferers since the trading community will just pass on the 2% tax on them.
“If the government is earning revenue from the bazaar samitis, let there be an enquiry as to how many trucks were entering and leaving the samiti premises every day and what collection was being shown,” he said. He believes most of the secretaries of the bazaar samitis were indulging in corrupt practices involving government officials.
On questions about corruption, the secretary refused to detail, saying such allegations were commonly charged against any government department.
Other major amendments introduced in the act include allowance of contract farming and grant of permission to any private sector player interested in starting a marketing yard in the state.