Raisins escape higher VAT

PUNE: With raisin manufacturers having successfully lobbied for a reduction in VAT, from 12 per cent down to 3 per cent, open auctions for the commodity will resume.
Raisin auctions are held in the heart of grape and raisin country, Sangli, Tasgaon and Pandharpur. These came to an abrupt halt with the imposition of 12 per cent VAT on raisins since these were seen as ''processed'' items.
"During the open auction of raisins, farmers often don''t give the raisins if they don''t get the kind of rate they want.
This year, with the traders having to pay 12 per cent VAT, they stayed away from the public auction. So, despite a demand, with a shortage due to drought conditions, farmers found no takers," Sopan Kanchan, president, Grape Growers Federation of India (GGFI), said.
On the other hand, grape growers have had a good season, having exported 1500-1700 container loads primarily to Europe. While 80 per cent of this has gone from Maharashtra, several container loads have also been exported from Hyderabad, Kanchan said.
The main markets for Maharashtra''s raisins are in the north and south of the country. While the all-India demand is for about 60,000 ton, the production this year was around 40,000 ton. The balance is met through imports, from Pakistan, Afghanistan and China, via Hong Kong.
The Afghan imports had lead to a demand, in north India, for the green coloured raisins. However, for the past two years, the demand is for a light brown, biscuit-coloured produce. This fetches the farmer between Rs 60-70 per kg although it is retailed at nothing less than Rs 150 per kg.