MP Wadiyar urges Sitharaman to continue to exempt pepper from GST

PTI, Sep 18, 2024, 9:06 AM IST

Bengaluru: Lok Sabha MP Yaduveer Krishnadatta Chamaraja Wadiyar on Tuesday said he has written to Finance Minister Nirmala Sitharaman to continue to exempt pepper from Goods and Services Tax (GST).

“Met Hon’ble FM Nirmala Sitharaman Ji to discuss GST exemption for black pepper, a vital issue for farmers in Kodagu, Hassan & Chikmagalur districts. Requested exemption continuation, citing agricultural produce classification & potential negative impact on farmers & exports (sic),” Wadiyar posted on X.

In his letter, a copy of which he had also posted on X, Wadiyar said that it has been brought to his notice that members of his Mysuru LS constituency, primarily from Kodagu district, have received notices from the GST office in Mysuru, stating that the sale of pepper grown at their plantation is subject to GST and that the planter also needs to be registered under the GST Act.

“The GST notice stems from a misunderstanding about the nature of the drying process. The pepper growers requisitioned me to bring to your kind attention that the drying process does not fundamentally alter the essential characteristics of pepper. It is primarily a preservation technique.
The GST Act’s definition of agricultural produce, clearly aligns with the nature of pepper, the treatment of similar commodities like paddy and chillies suggests that the classification of pepper as taxable product is inconsistent,” read the letter sent to the FM.

According to Wadiyar, the imposition of GST on these products could have significant negative consequences for the plantation districts of Karnataka, including Kodagu, Hassan and Chikkamagaluru, as well as for growers in Kerala and Tamil Nadu.

“It could lead to increased costs, reduced profit margins and potential job losses. Additionally. It could negatively impact exports, reducing India’s competitiveness in the global market,” he added.

Wadiyar requested in his letter that after drying of green pepper, this dried pepper could be given a separate HSN code and exempt it from GST applicability.