Reduce GST on pan masala to 5 per cent: Karnataka BJP urges Centre

New Delhi: Karnataka BJP unit on Thursday urged the Centre to bring down the GST on pan masala to 5 per cent from the existing 18 per cent and also hike the minimum import price (MIP) of arecanut to Rs 300/kg to save domestic growers reeling under the crisis due to lower prices.

Domestic prices of arecanut have fallen sharply to Rs 280/kg at present from the high of Rs 380/kg last year owing to cheaper and poor quality import of the commodity from Sri Lanka and other producing nations, it said.

A representation in this regard has been made to the union ministries of agriculture, commerce and finance separately by the Karnataka BJP Arecanut Cell President and MLA Araga Jnanendra.

"Arecanut growers are in distress due to falling prices. There is a need to curb cheaper imports and encourage value addition of arecanut," Jnanendra told reporters here.

Arecanut is used in making of pan masala, but the goods and services tax (GST) has been fixed higher at 18 per cent. "We have requested the union finance ministry to slash it to 5 per cent level as pan masala is manufactured by small scale industries," he said.

That apart, the Centre has been requested to further increase the MIP of arecanut to Rs 300/kg from the current Rs 251/kg so that to restrict cheaper and poor quality shipment of the commodity, added.

Jnanendra further said that the imports need to be monitored strictly as shipments are being made with under invoicing. Even quality of the commodity needs to be checked before allowing the shipments to enter India.

Cheaper imports are happening through Sri Lanka taking advantage of the lower duty benefit under the South Asian Free Trade Area (SAFTA). Recently, the Centre raised the MIP of arecanut to to Rs 251 per kg from Rs 162 per kg.

The country's annual arecanut production is around 5,00,000 tonnes, out of which 60 per cent comes from Karnataka. Tamil Nadu, Goa and Assam are other major growing states.