VAT on salt: Gujarat producers defer strike after state govt's assurance

Salt producers from Gujarat, who had threatened to stop production and supply from on Tuesday seeking complete rollback of VAT imposed on industrial salt, on Monday postponed their plan after getting assurance from the state government. A delegation of salt producers, who are opposing 5 per cent VAT imposed on industrial salt introduced by the government from the current financial year, today met Labour and Employment Minister Vijay Rupani with their grievances.

The delegation of around 15 salt manufacturers from different salt-producing regions in the state met Rupani at his office in Gandhinagar, who were then asked to meet Finance Minister Saurabh Patel in this regard. The minister assured to look into the issues raised by the salt producers and has convened a special meeting for it.

"Patel has called a joint meeting on the issue on Wednesday, which will also be attended by the authorised officials of the Commercial Tax Department," President of Small Scale Salt Manufacturers' Association, Bachubhai Ahir, said.

"Based on the assurances given by the Finance Minister, we have decided to postpone our protest against VAT till the meeting, and will decide on the same after the outcome of the meeting," he said. 

Salt manufacturers had earlier decided to go on a three-day strike from tomorrow to protest imposition of 5 per cent VAT on industrial salt by the state government. They had planned to stop production and supply for three days and hold rallies and protest march pressing for their demand.

Salt manufacturers alleged that 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 the state government has levied VAT on salt. VAT will be levied on manufacturers, who work on 10 acres 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 per cent of them have no lease as nothing was done to renew the lease, Ahir said.

Gujarat produces 176 lakh tonnes of salt annually and contribute to 70 per cent of salt requirement of the country. Of 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.