GST breather for Sal plates, Sabai ropes

Tax on these two minor forest products, a source of livelihood for millions of tribals, has been reduced from 18 per cent to 5 per cent

By Ishan Kukreti
Published: Monday 25 September 2017
In Odisha, 1.5 million people earn their livelihood by collecting Sal leaves

Taxation on minor forest products Sal leaf plates and Sabai grass ropes has been reduced under the new Goods and Services Tax (GST) regime from the initial 18 per cent to 5 per cent.

On September 1, the Chief Minister of Odisha Naveen Patnaik had written to the Union finance minister Arun Jaitley urging him to reduce the tax rate on Minor Forest Produce (MFPs).

Both Sal leaf and sabai grass are MFPs that tribal communities depend on, for their sustenance. In Odisha alone, 1.5 million people earn their livelihood by collecting Sal leaves.

While the GST has been reduced, under the pre-GST rules Sal leaf plates were exempted from Value Added Tax or exercise tax in the state. Royalty of Rs 72 per quintal of leaves was charged by the state’s forest department.

Organisations working for tribal rights, however, claim any taxation or cess on MFPs is unjustified. “GST on MFPs is violating the spirit of FRA (Forest Rights Act) and creating unnecessary roadblocks for the forest dwelling communities to translate rights into livelihood,” Chitta Ranjan Pani of Vasundhara, a non-profit working on tribal rights in Odisha, said.

Moreover, the GST rates on other MFPs remain the same.

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