Agri Business

Call to reclassify coir products under GST

LN Revathy Coimbatore | Updated on January 16, 2018 Published on October 31, 2016

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The proposed GST tax regime could adversely impact the coir industry, particularly manufacturers of coir mattresses, if coir and rubberised coir mattresses and sheets are not classified under the merit or essential list, say industry insiders.

Appealing to the Centre to classify such coir products under essential list or low tax bracket under the proposed GST regime, S Sundaresan, President, All India Coir Mattress Manufacturers’ Association, said both coir and rubber latex used in the manufacture of rubberised coir mattresses are natural products, eco-friendly and bio-degradable.

Such coir mattresses are predominantly made out of coir, an agro product. The sector is in line with the ‘Make in India’ scheme with a majority of inputs being sourced locally from unorganised sectors.

Coir mattress manufacturers face stiff competition from those that use PU (Polyutherine) foam as substitute for coir. The foam is invariably imported, he said. The Ministry of Finance at present provides various fiscal incentives to the manufacturers and exporters of coir products. For coir mattresses, a concessional levy of excise duty at 2 per cent (without CENVAT credit) or 6 per cent (with CENVAT credit) is being extended.

States charge nil or lower VAT rate of 5 per cent on coir products. VAT levy however varies from 5 per cent to 15.5 per cent on various coir mattresses as against 13.5 per cent to 15.5 per cent on foam-based mattresses.

“From information in the public domain, we understand that the Government is considering to tax environment unfriendly products “distinctly” from others in the GST regime. Consequently, classifying coir-based products under concessional category when compared to alternative products to promote their usage would result in penalising the polluting products and incentivising green products,” Sundaresan said, appealing for reclassifying coir products under merit list.

Published on October 31, 2016
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