The Federation of Indian Cashew Industry (FICI), the apex body of India’s entire cashew fraternity, has welcomed the government’s decision to put cashew, cashew nut and allied products in the five per cent slab of the proposed GST, saying such a move would greatly help the industry, now battling a string of problems in both the domestic and international markets.

Earlier, the GST Council had fixed the tax for cashew at 12 per cent, clubbing it along with other tree nuts.

According to FICI Chairman P.Somarajan, the demand for a downward revision in GST on cashew was due to a host of reasons. Currently, all the states have VAT on cashew in Schedule III, attracting a tax of five per cent with nil excise duty.

According to the general guidelines, the GST should be to the nearest slab of VAT and excise duty put together, which works out to five per cent, whereas for most of the tree nuts the same worked out to 14 per cent or higher. Also, unlike the trade of tree nuts, which is purely commercial in nature, the cashew trade is supported by a traditional industry that fetches livelihood for more than one million workers.

As market prices always move at a par with international prices, the high GST would affect the farmers because the farm gate prices would be slashed to accommodate the high tax, he said.

FICCI also requested the Centre to fix the GST on value-added cashew kernels at five per cent GST at par with sweets, restore the export incentives to five per cent from the current level of three per cent, and roll back the import duty till the country attains self–sufficiency in raw nut production.