Trade chamber seeks rollback of mandi tax hike

Indore: The trade body, Ahilya Chamber of Commerce and Industry, has urged the Madhya Pradesh govt to roll back its decision to increase mandi tax on agricultural produce transactions to 1.5 percent, warning that the move could push trade to neighbouring states and further fuel inflation.

In a representation to chief minister Mohan Yadav, the chamber said the existing mandi tax in Madhya Pradesh is 1 percent, while in most adjoining states the levy is around 0.5 percent. It argued that instead of reducing the burden on traders, the state has opted to raise the rate, a move expected to generate around Rs 800 crore in additional revenue.

“At a time when people are already struggling with rising prices of petrol, diesel, milk, cooking gas and transportation, imposing an additional burden through a higher mandi tax is not justified,” the chamber president Ramesh Khandelwal said.

“If neighbouring states continue to offer lower rates, trade will naturally shift there, causing losses to Madhya Pradesh’s markets and businesses,” he said.

The chamber maintained that the economic loss to trade could be significantly higher than the projected revenue gain. It cautioned that farmers and traders may increasingly prefer markets in neighbouring states, leading to a diversion of agricultural trade away from Madhya Pradesh.

The association also flagged the issue of double taxation on commodities such as turmeric, cumin and other spices, which are largely sourced from other states after payment of market fees there. The additional levy in Madhya Pradesh, it said, would ultimately increase prices of essential commodities and add to the burden on consumers.

The chamber has urged the state govt to review the decision in the larger interest of consumers, farmers and the trading community.