GST: Coir industry was tax-free in Kerala, but now?

Alappuzha: The coir industry, which was so far tax-free, has been placed in the five percent tax category under the GST, according to Mr  Sajan B. Nair, secretary- general, Federation of Indian Coir Exporters’ Association. “We are told the tax is refundable. But there will be delay in the  reimbursement.   If the taxes are levied at each point in the value chain and the exporter has to pay all this and wait long for refund, it will put a huge burden on the cash flow. The industry will come to a standstill. There should be a provision for fast-track refund of taxes to the coir industry with the advent of GST,”  he said.

He asked the state and central governments  to purchase their entire production through PSUs at agreed prices. “Currently, more than 85 percent of requirements in the industry come  from Tamil Nadu. The  last state budget had proposed a subsidy to set  up  coir fibre mills (75 percent for co-operatives and SHGs and 50 percent for private enterprises).  But in Kerala with small and distributed land holdings, the challenge  is the collection of husk. In the GST regime, there should be realistic schemes to work out the  collection of husks. Otherwise, production of coir fibre in Kerala will remain  a distant dream,” he said.