GST: Traders, planters, growers on tenterhooks

With the Goods and Services Tax to be implemented in barely a day, from July 1, farmers in Kodagu, mostly known for their cultivation of commercial crops, are on the edge.

The district, known for its coffee plantations and black pepper, is also one of the prominent tourist destinations with homestays and hotels largely dependent on tourism industry.

The apprehension that prevails over the traders seems to be the resumption of the situation that had arisen when Prime Minister Narendra Modi announced demonetisation of high-value currency notes on November 8, 2016. Now, the traders are thinking over loss and profits post-GST.

While cultivation of coffee and black pepper is not much rewarding for growers due to the dip in price in the last four months, the traders on the other hand have stopped procuring goods. Traders from the neighbouring Kerala state who had been regular buyers of pepper have also turned their backs on the farmers here, needless to say due to GST.

The lack of a cold storage unit for pepper had forced the growers here to depend on Kerala traders, who were buying in bulk.

According to the office-bearers of the traders’ association, coffee seeds are exempted from tax, while 5% tax will be levied on roasted coffee at curing units, 18% on coffee decoction, 28% on coffee instant and five per cent on pepper.

Pepper cultivation is spread over 15,000 hectares in the district accounting for an estimated 6,000 tonnes per annum. The high quality pepper supplied from Kodagu is in great demand and was also exported to Gulf countries.

Fall in pepper export

“In view of GST, the export of pepper has also come down, while the price per kg is hovering between Rs 500 and Rs 510 in the month of May. In the recent days, it slipped down further to Rs 450, keeping the farmers on tenterhooks,” according to coffee planter Thimmaiah.

Small Growers’ Association president Nanda Subbaiah said, “There is an information on GST showering goodies on small growers, with the cancellation of value added tax on coffee. The coffee is cultivated on 1.6 lakh hectares of land producing 1.3 lakh tonnes of coffee accounting for 38% production in the country.”

Subbaiah mentioned about the former Opposition party in Lok Sabha BJP who had vehemently opposed the GST proposed by the Congress-led UPA government at the Centre. “It is nothing but tragedy that 28% tax has been levied on branded goods. Had fuel and other petroleum products been brought under GST, the people would have benefited with a slash in fuel prices,” he added.

“Customers at restaurants are going to feel the heat with 12% GST to be borne by them. Restaurants with boarding facilities were the most preferred by tourists from middle class families. The district alone has 200 hotels, with Kushalnagar topping with over 70 hotels and150 restaurants,” said hotel owners association president Nagendra.

The homestay owners are also a feared lot, with facilities having over Rs 20 lakh annual transaction coming under the ambit of GST.

In all, 4,000 homestays are functioning in the district, with a meagre 500 registered with tourism department. The homestays were exempted from tax under the benefit of ‘Athithi Sathkara’. Now, the Commercial Tax Department authorities are out to inspect home stays.


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