GST may Blunt In­dian Co­conuts’ Com­pet­i­tive Edge in Global Mar­kets

The Economic Times - - Finance & Commodities - Kr­ish­naku­mar.PK @times­

Kochi: The im­po­si­tion of 12% goods and ser­vices tax (GST) on des­ic­cated co­conut has hit pro­duc­tion and ex­ports, threat­en­ing thou­sands of jobs in the in­dus­try, traders and ex­porters said. They said the “high” GST rate was a set­back to the in­dus­try at a time when both the do­mes­tic de­mand and ex­ports of des­ic­cated co­conut have been ris­ing.

Des­ic­cated co­conut is widely used in the mak­ing of bis­cuits and cook­ies.

Un­til now, des­ic­cated co­conut at­tracted taxes be­tween 0% and 5% in the south­ern states, where it is mainly pro­duced.

“There are around 80 des­ic­cated co­conut units in Tip­tur in Kar­nataka (the largest clus­ter for the prod­uct in the coun­try), em­ploy­ing thou­sands of peo­ple. Most of them have cut pro­duc­tion by 30%,” said Anil Por­wal, manag­ing di­rec­tor at Ma­havir Co­conut In­dus­tries.

Ex­port de­mand for des­ic­cated co­conut has steadily risen over the last few years and it jumped a stag­ger­ing six times to 20,000 tonnes in 2016-17. The value zoomed nearly eight times to around .₹ 225 crore. “We have be­come price com­pet­i­tive with other ma­jor sellers like the Philip­pines In­done­sia, Viet­nam and Sri Lanka. As a re­sult, the quan­tity ex­ported has shown a huge in­crease,” said Ganesh Vit­tal, part­ner of

ex­porters are wor­ried that high GST will make In­dian DC un­com­pet­i­tive in global mar­ket Vit­tal Agro In­dus­tries in Kasar­god, the largest des­ic­cated co­conut ex­porter in In­dia.

Ex­porters are wor­ried that the high GST rate will make In­dian des­ic­cated co­conut un­com­pet­i­tive in the global mar­ket.

“Mer­chant ex­porters like me have to buy from the mills to ex­port,” said N Srini­vas, part­ner at PSS Varadara­jan and Sons, a ma­jor ex­porter. “And now, I have to pay more to mills. The lo­cal price has gone up to .₹ 150 from .₹ 90 per kg.”

He added that the high price of In­done­sian des­ic­cated co­conut had pushed up In­dia’s ex­ports last year.

Given the in­creased ac­cep­tance of In­dian des­ic­cated co­conut, the Co­conut De­vel­op­ment Board has set an ex­port tar­get of 50,000 tonnes by 2020-21.

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