Karnataka cuts APMC user cess

The decision was taken following a recent bandh observed in APMC yards across the State.

The State Cabinet on Monday decided to reduce the market user cess charged by the Agricultural Produce Market Committee (APMC) from 1% to 0.6% of the transaction value. This is expected to benefit traders.

The decision was taken following a recent bandh observed in APMC yards across Karnataka against the State government’s decision to increase the cess to 1% of the transaction value, up from 0.35%.

On December 15, the State government increased the market fee to 1%. Traders had demanded a complete rollback of the hike and sought a level playing field with the traders who operate outside the APMC purview.

Minister for Law and Parliamentary Affairs J.C. Madhuswamy said that earlier, the government had imposed 0.35% cess, but it was considered too little for taking up development and administrative activities at the APMCs. But after the hike, traders claimed that an increase in user fee would make trade unattractive for buyers coming to APMC yards.

The Minister said a cess of 0.6% would be sufficient for maintenance and development works at APMCs. There are 161 APMCs in the State.

During a Federation of Karnataka Chambers of Commerce and Industry interaction last week, traders had urged Cooperation Minister S.T. Somashekar to withdraw the notification issued on December 15 and restore of the order issued on August 4, 2020, wherein the market fee was fixed at 0.35%.

On the matter of fixing the same market fee for selling farm produce outside APMC market yards, the Cabinet opposed it on the grounds that it would defeat the very purpose of the amendments made to the APMC Act. The APMC Act was amended to allow farmers to sell their commodities outside APMC yards in order to fetch better remunerative prices.

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