New Delhi : Tax on various products of the Khadi and village industries has almost doubled since imposition of the Goods and Services Tax (GST) and the tax on the Ayurvedic medicines produced by them has surged to 12%.
While Khadi yarn produced in the Khadi sector is exempted, other Khadi products attract 5% GST, Minister of State for Micro, Small and Medium Enterprises Giriraj Singh disclosed in a written reply to Vivek Gupta (TMC) in the Rajya Sabha on Wednesday. He said his ministry has already approached the finance ministry to either exempt the sector from GST or to allow seamless flow of input tax credit to the Khadi institutions.
Pointing out that the entire Khadi and Village Industries (KVI) sector was enjoying the tax exemption since the pre-independence area, the minister said many institutions lost the exemption cover because of the exempted small-scale industries drastically reduced from Rs 150 lakh to Rs 20 lakh, requiring them to obtain registration under GST.
The minister also provided details of the products of the village industries attracting much higher GST. For instance, it is 18% now on the handmade soap that was tax-free, 28% on herbal shampoo and leather products like suitcases and brief cases which were earlier having 5-12% tax.
