Rationalise VAT on tarpaulin, demand traders

Tarpaulin traders in the State have expressed anguish over the failure of the Government to rationalise the value added tax (VAT) on the product and bring it on par with the neighbouring States.

Tarpaulin of all kinds attract 4 percent tax in West Bengal, Andhra Pradesh and Chhattisgarh whereas it is 12.5 percent in Orissa. The disparity has resulted in diversion of trade to those States and the volume of business of the domestic traders was grossly affected.

“The difference of 8.5 percent between taxes had effected widespread infiltration of tarpaulin material through the porous borders and sold through a chain of unregistered dealers operating across the State. With volumes of domestic business hurt, the Government is losing crores of rupees in tax revenue,” Dhanraj Agarwal, president of Orissa Tarpaulin Traders Association, complained.

Tarpaulin’s utility spans protection of foodgrains, shelter material for the poor and people affected by calamities, besides being used as a packing material in transportation of goods.

The State Government, in fact, is a bulk purchaser of tarpaulin. And the domestic traders are not able to supply the material to it primarily because they cannot compete with those from outside. Thus, the supply orders are mostly placed with them at the cost of local ones.

The association has urged Finance Minister Prafulla Chandra Ghadei to make necessary amendments to include ‘tarpaulin of all kinds’ under Para-II of the Orissa VAT Act 2004 and bring down the tax rates.