The Centre’s decision of imposing a 5 per cent Goods and Services Tax (GST) on labelled gur (jaggery) packaging weighing less than 25 kg has soured things for traders and consumers who are staring at a price rise, at a time when festivities are around the corner.
Gur traders from Maharashtra fear that the decision would add to administrative costs besides the tax incidence, thereby leading to an increase in its price by about some per cent. At Vashi wholesale market, gur prices currently range between ₹42 and ₹50 per kg for different varieties.
The Centre has imposed 2.5 per cent CGST and 2.5 per cent SGST on jaggery of all types including cane jaggery (gur), palmyra jaggery( pre-packaged and labelled), while jaggery other than pre-packaged and labelled attracts nil GST.
The Bombay Gur Merchants’ Association convened a meeting of the traders on Friday, where it was decided to protest against the Centre’s decision, and submit memorandums to the APMC. They will also take up the issue with all elected public representatives (MLAs) in the Maharashtra assembly, seeking their support to reverse the decision.
“The biggest issue is that the labelled gur packages of less than 25 kg are now taxed at 5 per cent. Till now, GST was applicable for labelled gur packaging of above 25 kg. This will have a cascading impact on the entire value-chain of gur in Maharashtra,” said Dipak Shah, President of the Association.
Sold in smaller packs
Typical to Maharashtra, gur is sold in the wholesale market in smaller packing of 18-24 kg. And due to the Food Safety and Standards Authority of India (FSSAI) mandate, the packaging of such items is labelled with specifics such as the producer name, quantity, price etc. Elsewhere in India, gur is sold in packages of 30-40 kg without labels, which attracts nil GST. In such a scenario, Maharashtra’s gur industry is feared to suffer a big blow, said Shah.
There are about 70 wholesale gur traders in Navi Mumbai having daily trade volume of over 60 tonnes, which is in addition to the transactions taking place in other wholesale markets, including malls. “Since this issue directly impacts gur traders in Maharashtra, we have raised our objection with the Union Finance Minister Nirmala Sitharaman and also with the Deputy Chief Minister, Maharashtra Devendra Fadnavis seeking a resolution,” said Shah.
Kolhapur and Sangli are some of the recognised hubs for gur production, involving small producers and farmers in the value chain. “Jaggery falls under cottage industry (khadi gramodyog). Since it provided livelihood to farmers, it was provided many relaxations. Imposing GST on smaller packets of jaggery will hit this value chain very badly,” said Shah.
The Maharashtra markets supply gur to neighbouring States including Gujarat. “A large number of gur traders don’t have a GST number. Now, with the imposition of GST, this will complicate transactions,” alleged Shah, adding that it would be a discouraging the producers and traders at a time when the festivities such as Rakshabandhan, Ganesh Utsav and Janmashtami approaching closer. “All of our gur merchants would wear a black-band as a mark of protest,” he said.
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