FICI hails move to put cashew in 5% slab of GST
KOCHI: The Federation of Indian Cashew Industry, the apex body of India’s cashew fraternity, today welcomed the government’s decision to put cashew, cashew nut and allied products in the five per cent slab of the proposed Goods and Service Tax.
FICI said such a move would greatly help the industry, now battling a string of problems in both domestic and international markets.
Earlier, the GST Council had fixed the tax for cashew at 12 per cent, clubbing it along with other tree nuts.
FICI Chairman P Somarajan said FICI and other associations, along with the Cashew Export Promotion Council of India, had made a representation to Union Finance Minister Arun Jaitley and the Finance Ministers of the cashew growing/ processing states, drawing their attention to such an anomaly with a request to place it under the five per cent slab.
Somarajan said the demand for a downward revision in GST on cashew was due to a host of reasons. Currently, all the states have VAT on cashew in Schedule III attracting a tax of five per cent with NIL excise duty.
“As per the general guidelines, the GST should be to the nearest slab of VAT and excise duty put together, which works at five per cent whereas for most of the tree nuts the same worked out at 14 per cent or higher,” Somarajan said in a release here.
Also, unlike the trade of tree nuts, which are purely commercial in nature, the cashew trade is supported by a traditional industry that fetches livelihood for more than one million workers, the FICI chairman said.
“As the market prices always move at par with international prices, the high GST would affect the farmers because the farm gate prices would be slashed down to accommodate the high tax,” he said.
Somarajan said the government’s decision will prove to be a blessing to the industry, which is facing serious challenges in the domestic and international markets.
The FICI also requested the Union Government to fix the GST on value added cashew kernels at five per cent GST at par with sweets, restore the export incentives to five per cent from the present level of three per cent and rollback the import duty till the country attains self-sufficiency in raw nut production.
India currently produces less than 50 per cent of the raw nuts that it requires and is dependent on imports to cater to its processing and export requirements.
Source: ECONOMIC TIMES