Agarbatti makers seek GST relief

NEW DELHI: From agarbatti makers to publishers of children activity books and pickle makers, everyone is invoking interests of the common man and a possible adverse impact on employment to seek a waiver or reduction in the proposed GST rate.

Some have gone a step further to argue that an increase in levy on dry fruits and nuts from 5% to 12% will result in illegal trade from across the Line of Control and impact domestic players.

Others have, however, confined themselves to the domestic market. According to "the commitment of the GST Council, GST will subsume excise duty and VAT which has happened for most of the products but for agarbatti where the sum of excise, VAT is close to zero, GST is 12%. A GST of 12% would lead to a heavy cost escalation resulting in substantial decrease in usage of agarbatti, resulting in unemployment and collapse of the industry," the All India Agarbatti Manufacturers' Association said in a statement.

Although the lobby group did not point to hawan or puja samagri in its statement, sources pointed out that the product used during pujas was exempted from tax after the Uttar Pradesh government raised concerns.

Even pickle makers are complaining about the proposed 18% levy, arguing that most states currently levy around 7% tax. They are arguing that prices will rise by 10-14% if GST Council does not rework the levy. Similarly, the Federation of Educational Publishers in India has demanded a rollback in the proposed 12% levy on children activity books and lab manuals.

While books have been exempted from tax, some categories such as those for colouring and drawing and workbooks along with science practical and lab manuals as well as maths activity books will face GST, which appeared to be an "inadvertent anomaly," the agency said.

The government has argued that there will be no compliance or tax burden on smaller players and in a number of cases taxes have been imposed in order to get a product into the tax chain so that the consumers do not have to deal with the burden of tax on tax.