Agri Business

Fishmeal industry looks at Centre for GST reduction to remain competitive

V Sajeev Kumar Kochi | Updated on January 19, 2021

The industry, majority of which are operating under MSME, has been suffering due to GST that was earlier exempted from VAT and other indirect taxes

The fishmeal industry, which is making aquatic feeds, has urged the Centre to reduce GST rates on fish meal and its byproducts such as fish soluble paste/stick water and fish oil.

The existing rates are 5 per cent for fish meal, 18 per cent for fish soluble paste and 12 per cent to fish oil. The industry, majority of which are operating under MSME, has been suffering due to GST that was earlier exempted from VAT and other indirect taxes.

In its pre-budget memorandum, Dawood Sait, national secretary of All India Fishmeal & Oil Manufacturers & Merchant Association requested the Finance Minister to reduce GST on fish meal and fish soluble paste to zero per cent and fish oil from 12 per cent to 5 per cent.

Higher taxes in India have escalated the cost, resulting in increase in selling prices. This has forced the domestic aquaculture industry, the major buyer of fishmeal, to look at imports as prices offered by other countries are much lower, he said. However, exports of fishmeal and other fish products is also not a feasible option for the domestic industry on account of the lower prices prevailing in Peru and Chili, which are at a peak production season.

He said that many plants are struggling to survive by negotiating the price of fish, the raw material for the industry. This has hit the fishermen in the form of reduced selling price. Fishmeal industry will buy these unsold fish from fishermen which will contribute to improving their income.

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FAO has considered the fish meal industry as an engine to eradicate poverty of lakhs of fishermen. The fish catches secured by them above the requirements of human consumption either have to keep it for sun drying or throw it back to the sea, which will have serious environmental issues. The fish meal industry is helping them by purchasing the stock.

The non-purchase of huge stocks of wild caught by the fish meal industry would lead to disastrous consequences to fisher-folk who live on hand to mouth basis and heavily depend on the industry on their earnings.

The fishmeal industry, according to him, has been one of the adversely affected industries since 2017. Due to El Nino, there is a scarcity of quality fish catch and this has led to declining revenue. It also had to suffer due to GST. When the industry had just begun to recover, it was again hit hard by Covid 19 pandemic.

Published on January 19, 2021

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