Making an impassioned appeal for lowering the Goods and Services Tax (GST) rate on agarbattis or incense sticks, members of All India Agarbatti Manufacturers Association (AIAMA) met revenue secretary Hasmukh Adhia on Wednesday to ask for exemption under the proposed indirect tax regime. Invoking usage of the agarbatti during Vedic times, the association said that it is one of the oldest products to be exported from India and “symbolises all that is truly Indian” that has no match worldwide.
The association said that given the importance of agarbatti in the socio-cultural framework of the country, the proposed 12 per cent GST for agarbattis will lead to significant cost escalation, thereby, “disturbing the daily rituals of millions of families”. The association has appealed to the tax department that a tax rate of 12 per cent is a threat to the survival of agarbatti manufacturers across the country, requesting it to revise the rates considering its impact on the consumption of the product and employment.
“The 12 per ent GST rate proposal of Agarbatti will affect the industry gravely. Agarbatti is used every day for prayer by common man and he will be impacted by the high tax rate with the prices going up. Agarbatti currently is under 0 per cent excise and 0 per cent VAT in most states and the industry was expected to be included in the nil GST rate or at least the 5 per cent GST rate. We will now have to plead to the finance ministry,” Sarath Babu, president, AIAMA, said. The association also highlighted that other pooja items have been kept in the zero per cent tax category.
The GST Council in its fourteenth meeting last week had decided the fitment of goods in five tax slabs of zero, 5, 12, 18 and 28 per cent along with additional cess on luxury and demerit goods. Other pooja items such as prasadam, sindoor, kumkum have been exempted under the indirect tax regime, which is scheduled to be rolled out from July 1.
AIAMA said the industry is labour-intensive and suggested that if the sector cannot be completely exempted from the GST, a minimum rate of 5 per cent can be levied at the most. “Most of the agarbatti manufacturers are cottage and village units, and will be hit hard..many jobs and livelihoods of women will be under threat… The current government is looking at job creation and such a move will only be counter-productive,” Babu added.
While releasing the taxation list for goods and services, the government had said that the list of taxation rates will be subject to further vetting during which the list may undergo some changes. Many other industry associations such as those representing hotels have appealed to the government for a revision in tax rates. At the next meeting of GST Council tax on precious metals and other pending five items will be taken up for discussion.