Andhra Govt. reiterates request to exempt or reduce GST rates on several commodities

The Andhra Pradesh Government on Thursday reiterated the request of exemption or reduction of the Goods and Service Tax (GST) rates levied on certain goods used by common people or low income people.

"Though there is a reduction in effective rates of tax on several goods under the GST, there is no corresponding fall in prices of these goods. This is reflecting a bad image of the Government in the eyes of the public. Hence, it is requested that a robust price mechanism may be evolved at the government-level," Finance Minister Yanamala Ramakrishnudu said, in a letter written to the GST council chairman.

The state government is seeking the GST council to exempt or reduce the tax on several commodities. They are as follows:

Dry tamarind

Tamarind was exempted from tax under the VAT regime. But under GST, only fresh tamarind is exempted and dried tamarind, which is the main commodity used by common people in their daily cooking purpose, is made taxable at 12 per cent. Tamarind is a forest produce gathered by tribals and marketed by Girijana Cooperative Corporation in State. The levy of GST on tamarind will seriously affect the livelihood of tribals. Therefore, the government wants to exempt dried tamarind from the GST ambit.

Biodiesel

The major consumers of biodiesel like the Indian Railways, state transport undertakings, farmers and industrial consumers have stopped the purchase of biodiesel, due to increase in the rate of tax under GST. Biofuels are being promoted all over the world as a green fuel to mitigate harmful exhaust emissions from diesel vehicles. There is a need to reduce the rate of tax on biodiesel from 18 per cent to 5 per cent.

Hybrid cars

These cars are environment-friendly and required to be encouraged. The GST is levied not only at the highest slab of 28 per cent, but cess is also levied at 15 per cent at par with other costly luxury cars. This is against the government policy of green environment. Therefore, cess may be removed or reduced to 3 per cent.

Dry fish

It was exempted under the VAT regime. But under GST, dry fish is levied the tax at 5 per cent. Observing that the fresh tax affects the fishermen community, hence the commodity may be exempted.

Napa tiles

The Napa tiles are kept under 28 per cent GST slab. The Napa tiles are also used by low-income group people. Hence, the state government wants to reduce its tax rate to 5 per cent.

Cotton yarn in hanks

Under the VAT regime, it was exempted. But, under GST, it is taxable at 5 per cent. This is mostly used by Handloom weavers and it adversely affects the weaving community. Hence, this commodity should be exempted from tax.

Tribal products

The state government also seeks tax exemption on the products of tribal communities such as honey, coffee, turmeric, shikakai shampoos, nannaris etc. These goods, when sold by Girijan Cooperative Corporation Ltd., should be exempted from GST. The Girijan Cooperative Corporation Ltd. should be exempted from registration under section 23 (2) of GST Act.