GST steers fishing into choppy waters

August 17, 2017   admin  GST News
GST Impact : Fishers hit by GST, kerosene shortage - GST India Guide
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Pushes up input costs, brings down margins of fishermen as well as suppliers of nets and other accessories

Fishing had so far largely escaped indirect taxes. But with the Goods and Services Tax (GST) being levied for fish nets and accessories, boat hulls, engines and even dry fish, fishermen are feeling the pinch.

“Because of the 61-day fishing ban and the non-fishing season falling in October – November, we hardly have 6 – 7 months to fish. Nets are the key inputs for any fisherman. We now have to pay ₹5,000 more for a net that used to cost ₹45,000 and lasted for a maximum of a year with frequent repairs,” said Joseph, a fisherman of Nettukuppam.

A fisherman who owns a traditional craft would typically own different nets between ₹1 lakh and ₹3 lakh and every year he would invest a minimum of ₹1 lakh on the nets. “The nets differ based on the kind of fish that is to be caught, according to the season. Now-a-days nets cannot even be repaired since the quality is not very good. We are getting a lot of Chinese nets. You don’t have people who can mend the nets these days. GST has made fishing goods dearer by 10% across the board,” explained M. E. Raghupathi, a boat owner of Kasimedu.

Forced to reduce profits

Apart from fishing nets, floats, accessories and ropes used to pull nets now attract GST. P. Gandhirajan of Son India Boat Yard at Kanathur said that manufacturers like him have no other choice but to reduce their profits if they have to retain their customers. “Fishermen who buy boats ask us for price reduction and we have to give them since there is no subsidy even for purchase of boats. Ideally, fishing equipment must be given subsidy by the government,” he said.

Dry fish trade

The 5% GST on dried fish (karuvaadu) has hit sales badly, say dry fish manufacturers. Sailaja Chandrasekar, who along with her husband is in the trade, said GST is checked and enforced when they sell in other markets. “We provide jobs too. The women have to be paid ₹300 a day and the men, ₹500. Now since the cost of fish is high, we are forced to buy fish from other markets. The salt used in the process is taxed at 5%. Most times these days we only sell at a loss,” she said.

Devi Saravanan, another dry fish vendor of Kasimedu, said they have work only for 5 – 6 months in a year since even a small drizzle would spoil the fish. “We have not had many buyers after the tax since people don’t want to pay more,” she said.

  1. D. Dayalan of Indian Fishermen Association said that an increase in input cost would only mean an increase in prices of fish and unhappy consumers. “Only the very poor make dry fish. When there is excess fish, when fishermen are unable to sell the fish, or if the fish has no commercial value then it is made into dry fish. To impose GST on such an item is cruel,” he said, adding that his association had sent petitions to the State government and Fisheries Minister seeking their intervention.

Fishermen in many hamlets are planning to protest demanding that GST on fishing be withdrawn.

Source: http://www.thehindu.com/news/cities/chennai/gst-steers-fishing-into-choppy-waters/article19505442.ece

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