The new Goods and Services Tax (GST) regime in India will not have a significant impact on the tax structure of the country’s natural rubber sector, said Viju Chacko, Secretary of the Rubber Board.
The natural rubber sector at present attracted a basic tax of 5%. In addition to this, the last purchasing point, i.e., the consuming industry, had to pay a cess of Rs2 per kilogramme. Under the GST regime, the cess had been annulled.
Whether this benefit would be passed on to the farmer was something to be looked forward to, he said.
Under the GST regime, taxes on various products are fixed on the basis of the respective HSN (harmonised system nomenclature) codes. It is to be noted that the crop collected as tree lace, shell scrap and others, just before tapping is termed as field coagulum. But sometimes it is misquoted as scrap rubber.
Scrap rubber is the waste of vulcanised rubber products. Field coagulum is included in HSN Code 4001 whereas scrap rubber is included in HSN Code 4004.
As per GST, tax applicable for products included in HSN Code 4001 is 5% and that for HSN Code 4004 is 18%. So, care should be taken in the transaction of field coagulum, and the name “field coagulum” and HSN Code 4001 should be mentioned.