Basmati Rice: Haryana Rice Exporters Association Seek Mandi Fee Reduction

Because Haryana has the highest taxes on Basmati paddy, exporters have asked for a reduction in mandi and other assorted fees from the current 6.5 percent to bring it in line with neighbouring States so farmers can get better prices.

In a letter to State Chief Minister Manohar Lal Khattar, President of Haryana Rice Exporters Association (HREA), Sushil Jain, stated that the combination of Kachi Aadhat/Dami (commission charged by commission agents), market fees, and rural development cess places Haryana at the top of all states in terms of taxes.

Furthermore, the governments of Punjab, Uttaranchal, and Uttar Pradesh have made market fees and RD cess refundable on export. Furthermore, Haryana's electricity rates, labour costs, and other expenses are already higher than in neighbouring states. Jain emphasized.

“In Haryana, the high rate of market fees (levied by APMC mandis) and RD cess has become a source of corruption by creating unhealthy competition between fee-evaders and honest businessmen. In Haryana, it has become difficult for honest industrialists to compete and run their business," as per Jain.

Haryana was one of the few states that supported the Centre's three farm laws, which were repealed last year after nearly 18 months in operation. Following the Supreme Court's stay of the laws, direct purchases from farmers became common, as many states were lax in enforcing the mandi laws. According to traders, agriculture trading in Haryana has been limited to mandis since the laws were repealed.

According to Jain, Haryana increased market fees on basmati paddy from 0.5 percent to 2% effective June 22, 2021, and RD cess from 0.5 percent to 2% effective January 1, 2019. According to him, the Association has demanded that market fees on Basmati paddy be reduced to 1% and the RD cess be reduced to 0.5%.

The HREA president also stated that different fees in different states are discriminatory and go against the Central Government's policy. The Goods and Services Tax (GST) was introduced by the Centre with the main goal of 'One Nation One Tax,' which suggests that everyone should pay the same rate of taxation on the same commodity, he said.