BHUBANESWAR: The state government on Saturday demanded exemption of Goods and Services Tax (GST) on kendu leaf at the 48th council meeting chaired by Union Finance Minister Nirmala Sitharaman in New Delhi.Odisha was the only state to seek the commodity be listed under the exempted items as the centre-levied tax is adversely affecting the trade of lakhs of tribals, who are eking out a living by plucking the leaves.
Pitching for immediate roll back of GST on kendu leaf, state’s Finance Minister Niranjan Pujari said 18 per cent (pc) tax on the commodity is against the Forest Rights Act, 2006 and PESA Act, 1996 as it affects the livelihoods of kendu leaf pluckers, over 90 pc of whom are tribals, besides the binders and seasonal workers.
“A GST of 28 pc is already imposed on bidi, which is a finished product of kendu leaf. The double taxation has hit the pluckers hard. Since the traders file input tax credit, there will be no revenue loss for the Centre or the state if the tax is exempted,” he reasoned.
Odisha had imposed a five pc VAT on kendu leaf prior to the GST regime. A GST of 18 pc is being levied since July 2017 following the implementation of the one-tax policy. Pluckers remain at the receiving end due to the high tax as the traders who get the tender to collect kendu leaves pay them less citing the tax burden.
The demand could not be discussed in detail as the union minister referred it to the fitment committee, a panel of revenue officials from the Centre and states attached to the GST council, for further review of the proposal.The GST council, however, deferred two key state panel reports on setting up the framework of the appellate tribunal and capacity-based taxation on pan-masala and gutka due to paucity of time.
A group of ministers (GoM) led by Pujari on capacity-based taxation for evasion-prone commodities like pan-masala and gutkha had recommended specific tax-based levy, which was to be linked to their retail prices.