States in India asked to waive trade fee (Mandi tax) on e-NAM platform

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After the new farm bills that recently became laws to allow barrier-free trading of agriculture commodities across the country, the Centre has asked states in India to reduce the mandi tax to 0.5 per cent. As a first step, the market fees on the electronic National Agriculture Market (e-NAM) platform must be reduced, the Centre has told the states.

“Ideally, there should be no market fees on e-NAM after the new laws. However, since the e-NAMs were created to bring mandis under one platform, the market fees charged by mandis remained payable from its inception. Unless the states agree, the market fees cannot be waived off,” said a statement by the agriculture ministry.

Mandi fees and other imposts are levied in the aggregate range of 1-2 per cent in most of the states except in Punjab, which has 8 per cent (market fee and rural development cess 4 per cent, each). Haryana last month reduced the fees to 1 per cent from 6 per cent earlier. Rajasthan has reduced it to 2 per cent from 3 per cent after the Central laws came into force and it also passes on 0.25 per cent of market fees to farmers if they trade on e-NAM portal. In most of the states there is no market fee on fruits and vegetables and many had delisted these horticulture produce from APMC laws even before the Central laws.

Launched by the Centre in 2016, e-NAM is an online trading platform for agricultural commodities across states. So far, 1,000 mandis across 18 states and three Union Territories have been integrated with e-NAM platform.  The turnover of trade on e-NAM increased 74 per cent on year to Rs 30,845 crore during FY20. The volume went up 44 per cent to 77.13 lakh tonne during the period.

As per the recently promulgated farm bills, farmers have the freedom to sell their produce in any market within and outside the state of their residence, without the ambit of APMCs. No state levies will be imposed on trade outside the APMC mandis and the farmer is supposed to receive payment within three working days after deal. According to the new law, anyone having PAN card can trade, while the Centre reserves the right to lay down any new procedures, including mandatory prior registration.

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