Lentils Need to Be Tax Free in India

May 23, 2016 Taxation in India

NEW DELHI – Tax breaks are needed to help ease the effects if the ongoing spikes in the prices of lentils and beans in India.

Over the weekend the Food Minister of India Ram Vilas Paswan announced that the government has requested all state government to temporarily cease levying value added tax on the sale of pulses.

The Minister explained that the price of pulses in India have been rising recently due to significant shortfalls between the supply and demand for the foodstuff.

He added that in some areas traders and distributors of pulses are capitalizing on the shortages by hoarding vast amounts, and waiting for further price increases.

Pulses in India fall under a state-level VAT charged at a rate of between 5 percent and 7 percent.

Pulses, such as lentils and beans, are a staple ingredient in India, and the rising prices for all types of pulses is putting significant financial pressure on taxpayers.

The government will also take steps to help stabilize the price of pulses, and will increase its own stockpiles of products, in order to help smooth out any spikes in pricing or unexpected shortfalls in national supply.

Photo By: Kaushik Narasimhan