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Our Bureau

Chennai , May 8

THE roller flour milling industry in Tamil Nadu has urged the Chief Minister, Ms J. Jayalalithaa, to implement the value-added tax (VAT) system in the State as soon as possible so that they are provided with a level playing field.

"Early implementation of VAT is necessary to avoid distortions in inter-regional trade. Fears that consumers could be affected due to non-implementation of VAT have turned true," said Mr V.K. Gupta, President, Tamil Nadu Roller Flour Mills Association, in a letter to the Chief Minister.

With Tamil Nadu levying four per cent sales tax, one per cent resale tax, five per cent surcharge, and turnover tax for wheat flour, mills in the State are burdened an extra Rs 40-45 on a 90-kg bag.

"This means that flour in Tamil Nadu is costlier than the product coming in from other States," Mr Gupta said.

Mills in the State are facing threat from units in neighbouring States such as Karnataka, which has exempted wheat and wheat products from tax in the VAT regime.

"Our fear is that mills in Karnataka could dump flour here. Already, we have been hit by mills in North dumping flour," he said.

Until VAT is implemented, Tamil Nadu should exempt wheat products such as rava, atta and maida from sales tax, he added. "Also, a 12 per cent entry tax should be imposed on wheat products to offset other levies."

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