Haryana is India’s largest producer and exporter of basmati,now Haryana has asked all those selling rice to exporters to pay four % purchase tax on paddy with retrospective effect from ’96 However, Haryana millers purchasing paddy and exporting rice directly continue to remain exempt from this tax. As these are mainly the larger, well-established companies, they stand to benefit from less competition. Out of the 1,000 rice millers in the state, less than 50 are direct exporters. Given the steep price of basmati paddy over the last few seasons, coupled with penal interest the total liability of the Haryana rice industry is expected to be around Rs. 150 crore as reported by market sources. It is furtherly said, since these millers would now have to pay tax on paddy, their costs would be four per cent higher. This would make it very difficult for a merchant exporter to compete with India’s direct exporters in the international market, sources said. The tax would also make it more expensive for direct miller exporters to partially fulfil their orders through open market purchase of milled rice. |
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