AIFPA demands reduction in GST on agri-produce at primary level to help farmers

Ahead of the GST council meeting, the food processors' association AIFPA on Monday demanded a tax on agri-produce processed at a primary level be exempted or lowered to encourage the sector and boost farmers' income.

There are at least a dozen categories of products like pulp and concentrates, pickling, frozen foods and vegetables, as also dehydrated onion and garlic powder, that attracts GST of 12 to 18 per cent at present, All India Food Processors Association (AIFPA) President Subhod Jindal told reporters.

He said the Goods and Services Tax (GST) rates on these categories should be exempted or brought down significantly. The GST council meeting is scheduled for December 22.

"GST tax levels are still a problem. There was some relief as the tax rates were brought down in some products after the intervention by the food processing minister. There are a few more products on which taxes are required to be reduced to protect the industry," Jindal said.

Stating that 80 per cent of the country's food processing is done by micro, small and medium enterprises, he said the GST rates need to be rationalised accordingly to bring down the wastage at the farm gate and increase the income of farmers.

Elaborating more, former AIFPA president Amit Dhanuka said if you just add salt and turmeric as a preservative to a cut mango for making the pickle, then also a GST of 18 per cent is levied. Similarly, if salt or ice is used to increase the shelf life of a fresh fish, then also the same tax rate is levied.

"There should not be any tax during the primary processing of any items. It is not a final product and not into the retail package," he said.

Among food processing products, around 47 items attract zero tax, 52 products are under 5 per cent GST category, 25 products under 12 per cent category, 23 products under the 18 per cent and three items under the 28 per cent tax category, as per the official data.