The International Nuts and Dry Fruit Council (INC) and the Indo-Afghan Chamber of Commerce have sought a cut in the goods and services tax (GST) rate from the proposed 12% for dry fruits to 5%, saying higher indirect tax incidence will only encourage more illegal trade through the Line of Control from Pakistan-occupied Kashmir, a key region for dry fruit smuggling.
Currently, Delhi, Gujarat, Himachal Pradesh and Madhya Pradesh impose a 5% VAT on dry fruits, INC said. Delhi accounts for roughly 75% of the country’s dry fruit trade, so the VAT rate applicable here should be the benchmark for the levy of GST, the INC argued. Dry fruit traders and importers say they, as such, face tremendous pressure due to dumping of cheaper items smuggled through Pakistan-occupied Kashmir. So a higher GST rate, along with the import duties, will make their businesses unviable.
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“When the GST was being discussed, industry was told that their tax incidence will remain around the same level as now. So the GST should be brought down to 5%, which is the level of VAT key states levy,” INC’s ambassador for India Raju Bhatia told FE.