Salt producers from Gujarat, who had threatened to stop production and supply from Tuesday seeking complete rollback of VAT imposed on industrial salt, postponed their plan after meeting Gujarat BJP chief Vijay Rupani and Finance Minister Saurabh Patel on Monday saying the government was “positive” on their demands.
Leaders of Namak Satyagrah Samiti (NSS), a group formed by salt manufacturers of the state met Rupani, who is also Minister of Labour and Employment and Saurabh Patel in Gandhinagar. After the meeting, the NSS postponed its three-day strike which was otherwise scheduled to begin form Tuesday.
“We held a meeting with Rupani and later with Patel. We explained to the Finance Minister that calculation of government to collect Rs 5 crore annually by imposing VAT (value-added tax) on salt was flawed as only about 30 lakh tonne of salt is traded interstate which would generate only Rs 3 crore. The Minister was positive and asked us not to go on strike and instead invited us for another meeting on Wednesday. We agreed to the suggestion and have therefore postponed the strike as of now,” Bachubhai Ahir, chairman of Namak Satyagrah Samiti told The Indian Express.
The government had announced to introduce VAT on industrial salt from this financial year while passing the Budget for fiscal 2016-17. But the decision did not go down well with salt-cultivators of the state saying maintaining separate records for industrial and edible salt was not feasible as there was no such distinction at the manufacturing stage. NSS also says that most of around 33,000 salt-manufactures of the state don’t know even basic computing and that the new levy will give birth to “inspector raj” in the industry.
The salt manufacturers had met the Finance Minister early this month and sought withdrawal of the new tax which was introduced for the first time in the state. Following this, the government announced partial rollback by exempting cooperative of salt-pan workers, those cultivating salt on plots of 10 acres or smaller and those who were manufacturing the commodity on plots leased out by the government. But the NSS had stuck to its demand of complete rollback. In their last-ditch effort before going on strike, they met the BJP president on Monday.
The NSS president added that only a small section of manufacturers had infrastructure to comply with the new tax regime. “The government can expect to collect VAT from only 15 to 20 big corporates which are into salt manufacturing. There are around 400 manufacturers of medium size but they lack necessary infrastructure to maintain records and calculate tax. Around 2,300 others are cultivating salt on 10 acre plots and the majority, around 25,000 to 30,000 do this activity on even smaller plots,” Ahir said.
Gujarat is the largest salt-producer of the country. It produces around 1.8 crore tonnes of salt every year. This is about 70 per cent of the total production of 2.4 crore total production of the country. Kutch, Surendranagar, Morbi, Devbhoomi Dwarka and Bharuch are the major salt-cultivating districts of Gujarat.
Ahir says that around 85 lakh tonne of salt produced in Gujarat is consumed by industries, chiefly by those manufacturing soda ash. Another 80 lakh tonnes is refined and iodised for human consumption. He said that state exports around 60 lakh tonnes per year while 30 lakh tonnes is sold to other states of India. The price of the commodity ranges from Rs300 to Rs400 per tonne.
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