The Ahilya Chamber of Commerce and Industry has called on the Madhya Pradesh government to withdraw its decision to increase the mandi tax on agricultural produce transactions to 1.5 percent. The trade body warned that the move could drive trade to neighbouring states and exacerbate inflation.
Chamber's Representation to Chief Minister
In a representation to Chief Minister Mohan Yadav, the chamber highlighted that the existing mandi tax in Madhya Pradesh is 1 percent, while most adjoining states levy around 0.5 percent. The chamber argued that instead of easing the burden on traders, the state has chosen to raise the rate, a decision expected to generate approximately Rs 800 crore in additional revenue.
Impact on Traders and Consumers
Chamber President Ramesh Khandelwal stated, "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." He added, "If neighbouring states continue to offer lower rates, trade will naturally shift there, causing losses to Madhya Pradesh’s markets and businesses."
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.
Double Taxation Concerns
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.
Urgent Call for Review
The chamber has urged the state government to review the decision in the larger interest of consumers, farmers and the trading community.
