Demanding complete rollback of VAT imposed on industrial salt, the producers in Gujarat will stop production and supply of salt into the market for three days from Tuesday.
“We protest imposition of 5% VAT on industrial salt by the state government. We will stop production and supply for three days and will hold rallies and protest march pressing for our demand for a complete rollback,” Small Scale Salt Manufacturers’ Association president Bachchubhai Ahir said.
Ahir, who is also spokesperson of Namak Satyagrah Samiti, formed to protest the VAT imposition, said that salt manufacturers will stop production beyond three days if the government does not take action on their demand.
Salt manufacturers, mostly based in Gandhidham on the western coast of Gujarat, said 5% VAT on industrial salt, introduced in the 2016-17 annual budget, is full of technical complexities which expose them to harassment from VAT inspectors.
This is the first time that the state government has levied VAT on salt.
“VAT will be levied on manufacturers who work on 10 acre or more plots given on lease by the state government. There are 25,000 manufacturers who work on 10 acres or more plot of land, but 25% of them have no lease as nothing was done to renew the lease,” Ahir said.
“Then there are nearly 40,000 salt pan workers who work on less than 10 acres plot, and they hardly have obtained or renewed lease. Furthermore, to distinguish industrial salt from edible salt is a difficult task for them. So VAT imposition only compounds their problem,” he said, adding that the government will hardly earn Rs 3 crore from VAT on salt.
“We protest Inspector Raj and will continue to stop production unless our demands are met. Government claims it will earn Rs 10 crore from VAT on salt, while we challenge the government that the revenue will not be more than Rs 3 crore annually, which is why it is bent on harassing 50,000 families which are involved in manufacturing salt for a living,” he said.
Gujarat produces 176 lakh tonnes of salt annually, and contributes to nearly 70% of salt requirement of the country.
Of the 176 lakh tonnes, 46 lakh tonnes is used for consumption, while 60 lakh tonnes is for industrial use.
As much as 60 lakh tonnes salt is sent out to other states, of which around 30 lakh tonnes is industrial salt, the quantity on which VAT will be imposed, Ahir said.