Mandi tax may 'rob' festivals of dry fruits

Indore: Fasting with dry fruits this festive season may burn a hole in the pocket since state government has proposed to levy mandi tax.

On August 14, Madhya Pradesh government proposed to levy 1.5% mandi tax on dry fruits coming to Indore for sales to generate revenues, but the move has left traders worried about loss of business and additional compliance burden.

The government had also invited objections from stakeholders within weeks. Merchants of Siyaganj, city’s largest wholesale market, have raised objection over the tax stating that it would make dry fruits business difficult for them. Trade may turn towards other states if the proposed tax is levied.

Siyaganj Wholesale Kirana Merchant Association has sent a memorandum to the government raising their concern over the proposed levy. “The 1.5 mandi tax will not only escalate cost of dry fruits but also discourage local business. No state in the country has imposed mandi tax on dry fruits and if Madhya Pradesh government levies tax, traders will prefer to sell in neighbouring states,” Siyaganj Wholesale Kirana Merchant Association president Ramesh Khandelwal said.

According to the association, Indore is third largest market of kirana in the country after Mumbai and Delhi with an estimated turnover of Rs 100 crore.

A dry fruit trader Raghuvendra Vyas said, “The government plans to earn revenues through mandi tax, but they will lose instead because traders will shift business to other states.”

Almost 90% requirement of dry fruits is fulfilled through imports from the United States, Iran, Afghanistan and Dubai as very limited varieties is grown locally in the country.

Traders said the levy will hit sales of dry fruits in festive and upcoming winter season, the peak demand period when consumption of dry fruits remains high.

Khandelwal said, “It will create a lot of problems for customers as well as traders. Increased cost is one thing traders will also have to file 25 returns in a year with the mandi tax.”