Mumbai, March 23 (IANS) Wholesale trade in all commodities in Maharashtra halted Tuesday following a strike against the proposed hike in Value Added Tax (VAT), the Federation of Associations of Maharashtra (FAM) said.

"We have received reports from all over Maharashtra and there is total response to the strike. Around 750 different associations of wholesalers and their 600,000-plus members have participated," Mohan Gurnani, president of FAM that called the strike, told IANS.

Essential services like milk supply, fresh fruits and vegetables have been exempted from the strike, Gurnani said.

The association has demanded a rollback in the hike in VAT rate, proposed to be increased from 4 to 5 percent and total withdrawal of the proposed 5 percent VAT on essential commodities.

"This 20 percent hike (from 4 to 5 percent) will have a cascading effect on market prices of all goods and will add a large burden on consumers who are reeling under inflation," FAM general secretary Arun Doshi added.

All major wholesale markets in Mumbai, Navi Mumbai, Nashik, Pune, Kolhapur, Amravati, Jalgaon and other district headquarters remained shut.

Doshi said nearly 35 percent of all items consumed in the state came from other states like Punjab, Haryana and Andhra Pradesh.

Moreover, he said the government had now proposed a 5 percent tax even on essential items that were thus far exempt from taxes.

Gurnani said though the additional burden would not be borne by the traders and shall be passed on to the consumers, it will lead to further -price rise.

Unless the government agreed to their demand, the entire wholesale and retail trade could come to a total halt after the state budget later this week.