Odisha Government urged the Central Government to exempt District Mineral Foundation (DMF) fund from taxation range. Income Tax (IT) authorities are diminishing the interest aggregated from the deposits in the DMF accounts by deducting taxes. DMF is operative in all districts of the state in terms of procurement of Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY).
DMF is undertaking developmental projects in the mining affected zones of Odisha. Funds of nearly rupees 12,000 crore is at hand with the organization, placed in banks and accruing interest. The substantial amount of interest accrued out of the funds will be utilised for concernment and benefit of people in mining-affected areas. A considerable amount of DMF funds will be spent for clearance of tax liability, unless liberated. Therefore, the State Government requested the Union Ministry of Finance to keep the interest income of DMF bank deposits off the hook from IT.
The Ministry of Finance has also been bellied up to eliminate cess and surcharge on the customs duty and direct taxes. Article 270 of Indian Constitution grants for sharing of the proceeds of all Union taxes between the Union and States, but the cess and surcharge gathered is not distributed among the States. The State share in Central taxes is shortened due to reduction of Excise duty, still cess is not shared with the State. Odisha demanded to make cess and surcharge as part of the divisible pool, for its welfare.