Financial Daily from THE HINDU group of publications
Saturday, Mar 19, 2005
Agri-Biz & Commodities
Industry & Economy - Taxation
VAT woes for poultry sector
Coimbatore , March 18
WILL Kerala follow other States in exempting the poultry sector from value-added tax by treating it as a part of agriculture?
The industry is worried that Kerala's notification on VAT has excluded poultry from the list of exemption categories, though other food and animal products/items under entry No. 29 are exempt.
The Poultry Development Promotion Council (PDPC), which is promoting the cause of the broiler sector within the poultry industry, has noted that entry No. 29 of the first schedule has, however, exempted meat, fish, egg and livestock, and other items such as vegetables and fruits.
The broiler is neither exempt nor has it been put under items taxable at 4 per cent rate, which would mean that it would be taxed at 12.5 per cent.
This would ruin the State poultry industry, the PDPC said in a statement.
At present, poultry reared within Kerala is exempt from sales tax, but chickens imported from outside the State are subject to an 8 per cent entry tax and a 15 per cent surcharge.
According to PDPC, no State except Kerala has ever imposed sales tax on chicken, treating it on a par with other livestock.
But by excluding broiler from the list of exempted items, the State would be taxing even the State's poultry farmers, who were hitherto exempted from tax by virtue of a government notification.
The PDPC has appealed to the Kerala Government to exempt the poultry from the purview of sales tax.
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