The Hindu : Kerala News : Call for uniform VAT for inter-State oil trade

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Wednesday, Feb 13, 2008
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Kerala

Kerala

Call for uniform VAT for inter-State oil trade

Staff Reporter

Oil seeds development fund mooted

Solvent extractors urge review of restrictions
Suggest oil palm be declared plantation crop

KOCHI: The South Zone meeting of Solvent Extractors’ Association of India which reviewed the current solvent extraction scene and vegetable oil industry as a whole called for uniform Value Added Tax (VAT) for inter-State trade and suggested the formation of an “oil seeds development fund” to increase local production on the lines of sugar development fund.

The meeting felt that such a move would help India, which recorded the lowest productivity per hectare (900 kg) of cultivation.

On the agenda of the meeting of solvent extractors was also the review of the restrictions on import of palm oil through Kerala ports.

Problems faced by rice bran processors, coconut cultivators and palm planters figured prominently on the agenda.

The Pre-Budget memorandum suggested that the Oil Seeds Development Fund be set up with a cess on imported edible oil and “a comprehensive package of fiscal and other measures may be initiated.”

The meeting noted that despite vast acreage (25 to 26 million hectares) under edible oil seeds cultivation, productivity has been low and total production plunged to 23.9 million tonnes in 2006-07 from 27.9 million tonnes in 2005-06.

The solvent extractors also pointed out that this year, total vegetable oil import bill would be to the tune of Rs.12,000 crore and might touch Rs.15,000 crore in the next year owing to spiralling price of the commodity in the international market.

The vegetable industry has suggested several measures, including development of oil palm.

If oil palm is declared plantation crop by State governments, it would help draw local entrepreneurs as well as foreign investments.

Implementation of the packaging order passed in 1988 had been left to the State governments to implement.

However, a move recently by the governments of Uttar Pradesh and Gujarat had created a furore in some segments of the industry.

Therefore, the vegetable oil industry has appealed to the government to implement the packaging order in a phased manner so that no segment of the industry was put into difficulty.

At the same time, adulteration can be checked and overall quality improved through the implementation of the rules.

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