Daijiworld Media Network – Mangaluru (MS)

Mangaluru, Aug 30: A 5% GST is levied on the sale of arecanut, creating a burden for those conducting business honestly through invoices. Arecanut traders are now urging the government to reduce this rate to 2%.

Arecanut cooperative societies in the coastal Karnataka and Malnad regions are issuing invoices honestly and selling arecanut to North Indian states, including Gujarat, with 5% GST. Some private arecanut sellers, however, enter agreements with buyers and issue cut bills, showing only half of the actual amount. This practice reduces the tax by 50%, causing a loss to the state exchequer. Traders argue that reducing GST to 2% would encourage compliance and benefit farmers.

Kishore Kumar Kodgi, president of Campco, said, “If the GST on arecanut is reduced from 5% to 2%, farmers will be more inclined to sell their produce to cooperative societies. This would increase government revenue and make cooperative societies more competitive.”

Arecanut growers rely on copper sulphate during the monsoon to protect their crops. Farmers in DK, Kasargod, Shivamogga, Udupi, and Chikkamagaluru spray copper sulphate three times to destroy pests. While most other pesticides and fertilizers are subject to a 2% GST, copper sulphate is taxed at 18%. Growers are now demanding that the GST on copper sulphate be reduced to 5%.

Arecanut farmers also depend on carbon fibre rods for harvesting and farm maintenance. These rods are subject to a 48% import tax, making them unaffordable for many farmers. Growers are demanding a reduction in the import tax on carbon fibre rods to benefit farmers of all classes.

Simplifying GST on arecanut is necessary. Instead of the current CGST, SGST, and IGST structure, a simple and unified tax system should be implemented. The responsibility of KYC follow-up should rest with the relevant department, and action should be taken to prevent holding taxpayers accountable if the KYC does not match under the ITC portal of GST. The respective departments should be held responsible for any errors.

Although the country is self-sufficient in arecanut production, illegal imports continue unabated, creating additional challenges for farmers.