How GST Instigated Nationwide strikes by the Dry Fruit Merchants?

Delhi, Mumbai, Ahmedabad, and Jaipur are the leading dry fruit markets of India. Dry fruit merchants of these major cities have called a strike to protest against the imminent tax rate hike. Under GST, dry fruits are kept in the 12% category which is not acceptable to these merchants.
To pressurize the government, a one-day strike has been called by Dry Fruit and Kirana Association of Gujarat. Merchants are demanding a reversal of rates from 12% to 5% which was charged in the previous tax regime. They are worried about its detrimental effect on demand and assume that new GST rate will impact 20-25 % of their total sales.

All trade associations and merchant lobby extended their support to this Bandh. They kept their shutters down to showcase their protest. Markets of Delhi, Jaipur, Mumbai and other important cities observed complete closure because of bandh called by the association. With such large size protest, Dry Fruit Association has conveyed a strong message to the central government.

Gujarat is the hub of dry fruit trading and its market is around Rs. 10000 crore. Delhi, being the capital city and central part of India, shares 70% of total dry fruit business and witnesses a turnover above Rs. 50000 crores. Nearly 50-60% of demand in India is completed by importing dry fruits from other countries. There is already import duty of 30% on dry fruits and more or less VAT on dry fruits was 5% across the country.

Vice Chairman of Kirana Association – Gujarat said that their voice has been unnoticed despite several attempts to reach to the authorities for a rate reversal. Therefore, they have to take this consequent step and called bandh to register their protest against this rate hike. He also included that livelihood of innumerable people relies on this sector and this unfriendly rate hike will affect the market extensively. They requested the government to re-look into the decision and revise GST rate of Dry Fruits from 12% to 5% again.

Surprisingly, on Sunday meet, GST council has revised the rates of cashew kernels and raw cashew nuts from 12% to 5% but the council also hiked the rates of salted or roasted cashew/ flavoured cashews from 12% to 18%. 

Merchants were seen unsatisfied with a partial revision of rates and raised concerns over other dry fruits – walnuts, almonds, etc. They are projecting that such rate increase will dampen the demand for other dry fruits to a large extent.