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Tax on fish meal may impact seafood sector from October

26 Sep 2019

While GST exemption granted for fish meal till this month-end has brought relief to the fisheries sector, its levy from October could hit the seafood industry as the product is a key ingredient in shrimp and fish feed. Shrimp is the major item in the seafood export from India worth over 47,000 crore annually.
Fish meal made from trash fish and fish wastes goes into the making of shrimp and fish feed used in aquaculture farms. After a month-long strike by the fish meal industry which saw fish prices crash, the Centre granted an exemption of GST for fish meal from July 2017 to the end of September 2019.
“The shrimp feed prices could increase by 4% in the short term if fish meal comes under GST from next month as it is the main raw material for the feed. This will hit the feed factories as the industry is working in an intensely competitive high-volume, low-margin segment,’’ said PS Narendra, executive director of Growell Processors. Over 70 fish meal factories spread over the coastal states of Karnataka, Gujarat, Kerala, Tamil Nadu, Maharashtra and Goa had protested against the decision of the government to collect 5% GST with retrospective effect.
“We are thankful to the PM and the government for acceding to our demand. But it would have been better if a complete exemption was given as taxing fish meal will affect the income of fishermen and the aqua feed price,’’ said Dawood Sait, secretary of All India Fishmeal & Oil Manufacturers and Merchants Association.
The tax dues from 2017 comprise a huge sum which would have led to the closure of the units if they were forced to pay, he said.“At present due to low catches, most of the fish meal factories are underutilised. GST will add to the cost,’’ said Ravi Pelluru, CEO of BMR Industries.

Source: The Economic Times

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