In a memorandum to the union finance minister, president of SEA, Sandeep Bajoria, has stated that the above mentioned commodities which attract nil or a minimum of 2 per cent sales tax presently will attract a hefty 4 per cent tax throughout the country.

The imposition of double the sales tax would be detrimental to trade and industry and also the vegetable oil industry which is already passing through a grave situation operating at as low as 30 to 35 per cent capacity utilisation.

It would be difficult for the trade and industry in the unorganised sector to compete with the unscrupulous traders and trade/industry which shall further lead to evasion on sales tax.

The association has called for continuation of exemption of the items attracting nil tax or may place the above items in the group of commodities which attracts special flow rate of only one per cent. It is worth mentioning the sales tax on the said items have been kept at lower level being essential commodities and its nature of mass consumption.

Presently, edible oils attract 4 per cent in Madhya Pradesh (MP), 2 per cent in Gujarat, Uttar Pradesh (UP), Andhra Pradesh (AP) and Karnataka while 1 per cent in Maharashtra and nil in Tamil Nadu.

Oilcakes attract 4 per cent tax in Tamil Nadu, 1 per cent in UP. Similarly gingelly oil attracts 4 per cent in MP, nil in Tamil Nadu, 1 per cent in Maharashtra and 2 per cent in the rest of the states. Rice bran oil attracts 1 per cent tax in Maharashtra, 4 per cent in MP and Tamil Nadu and 2 per cent in othe states.

Deoiled cakes enjoy nil duty in three states i.e. Maharashtra, UP and Tamil Nadu and 2 per cent in all the other states. Vegetable oils (expeller) enjoys nil duty in Tamil Nadu, 1 per cent in Maharashtra and 2 per cent in the rest of the states while solvent oils attract nil duty in Tamil Nadu, 4 per cent in Maharashtra and MP and 2 per cent in other states.