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It is argued that the tax applicable from the rice miller down to the retailer is in effect a multipoint tax on rice.

CHENNAI, Aug. 29

THE Tamil Nadu Government has levied a compound tax based on turnover on rice trade with effect from August 13, according to trade sources.

This has hit the trade adversely and volumes of trade have dropped drastically, they said.

The tax applicable from the rice miller down to the retailer is in effect a multipoint tax on rice, traders said.

Earlier, the State Government had announced in the Budget a two per cent tax on the rice millers but had put it on hold, following the traders' request.

But it has subsequently announced a turnover-based tax that will have an impact on the entire rice trade, including rice being brought in from neighbouring States such as Andhra Pradesh and Karnataka, traders said.

In recent announcement, the State Government has announced a turnover-based tax, and has announced various slabs of tax from Rs 3,000 per annum for traders with a turnover up to Rs 3 lakh, Rs 8,200 on a turnover ranging from Rs 3 lakh to Rs 5 lakh, Rs 15,000 for a turnover between Rs 5 lakh and 10 lakh, and so on up to a tax of two per cent tax for a turnover above Rs 2 crore.

The traders have urged the Government to call off the tax, trade sources said.

The traders are planning a major agitation unless the Government reconsiders the levy, they said.

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