The Hindu Business Line : NECC says Kerala VAT provisions harmful to poultry

THE National Egg Coordination Committee (NECC) has urged the Government of Kerala to withdraw the 12.5-per cent tax on live broilers and dressed chicken, under the Value Added Tax (VAT).

The move is not just hurting the interests of both poultry farmers and consumer alike but also has created a confusion in the market.

Before the introduction of VAT, Kerala used to levy an over all sales tax of 9.2 per cent on chicken.

In a press release, the NECC said farmers and traders have been appealing repeatedly to the Kerala Government for exemption under VAT, as was being done by other States. Ironically, the State Government, while not granting any relief, has enhanced the tax rate from 9.2 per cent to 12.5 per cent.

Recognising poultry meat as an agricultural product, practically all State governments have exempted live broilers and dressed chicken under VAT. Even the VAT scheme envisages that by and large all agricultural products and edible items in unprocessed form would be exempted from tax, the NECC claimed.

Interestingly, the local production of Kerala is adequate to meet only 10 per cent of its demand, while the remaining 90 per cent is met through supplies from Tamil Nadu and Karnataka. Following the imposition of 12.5 per cent tax, the flow of broilers and dressed chicken from these States has come to a halt, the release said.

The consequences of this move have been a significant fall in prices in Tamil Nadu while the consumers in Kerala are forced to buy dressed chicken at Rs 130 per kg, compared to Rs 70 per kg prior to VAT introduction, the NECC said.

Given to understand that the logic of the Kerala Government to raise the tax being to protect local farmers, the NECC said this was not the ideal way of doing it.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page