18% GST on pickles will blow a death knell to the industry, worries Mr Rajheev Agrawal, CEO of Nilon’s Enterprises Pvt Ltd of Pune. At present, he explained, 26 of the 29 states of the country tax pickles at the rate of 5%. Karnataka imposes none, while Rajasthan and Kerala impose VAT on pickles at a higher rate. Add 2% Excise to it and the weighted average of Octroi amounts to 0.1%. That totals to 7.1% tax on pickles at present, which the GST Council intends to raise to a whopping 18%.
Pickle is a staple food for a very large part of the people of the country. When the prices of vegetables shoot through the roof, many impoverished are compelled to satiate their hunger just with chapati and pickles.
“The market is so fiercely competitive and price sensitive that the industry operates with a paltry margin. If the proposed GST rate was implemented, the industry, unable to bear the burden, will be compelled to increase the prices of pickle in the range of 10-14%,” said Agrawal.
“Pickle is just an example. The proposed GST Tariff has put an agonising load on most of the processed food products of Nilon’s and its kind. Food processing is an agro-friendly industry which makes its purchases in cash and directly from the farmers. If agro-food processing industry was pushed to the corner, it would impact the farmers adversely. I request GST Council to review its decision at the next meeting and provide the food processing industry a relief,” he added.
