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Andhra Pradesh, the largest egg-producing state in the country, accounting for more than one-third of the total 120 million eggs produced per day. Now the poultry industry in the state is facing heavy toll of burden of double sales tax and the spiraling prices of feed ingredients. So grave is the situation that 25 per cent of the total 16,000 poultry farms in the state, owned mostly by small and marginal poultry farmers, have already closed shop, unable to carry on the operations any longer. More are likely to follow suit if the situation does not improve in the next few weeks. Before the uniform sales-tax policy came into force, feed ingredients were tax-free in other states, whereas they used to attract a mere two per cent sales tax in Andhra Pradesh. However, after the uniform sales tax policy became operational, ingredients are attracting sales tax across the country at a uniform rate of four per cent. The cumulative sales tax burden of eight per cent is proving to be too much on poultry farmers, particularly on the small and marginal farmers, as the feed cost accounts for 80 percent of the cost of production. The president of poultry federation reported that the earlier system was better in which only two percent sales tax have to pay. After the uniform sales tax policy became operational ingredients attracting sales tax across the country at a uniform rate of four per cent. The double sales tax is wiping out whatever small profits the farmers used to earn till the new system came into force. The average cost of producing one egg in the last five months of this year worked out to Rs.1.35 where as the farmers got average prices of Rs.1.18 per egg, it means that the farmers on an average suffered a loss of Rs.0.17 per egg. The farmers would have reduced the losses to a great extent or even made some profit had the uniform system of sales tax not been enforced. In addition to this the ever rising prices of feed are making the lives of poultry farmers miserable. |
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