GST waiver for net components will boost sea food exports, say Thoothukudi fishermen

India is one of the world’s biggest seafood exporters and the target is to ship marine products worth 14 billion USD by 2025; but the taxation policies are not conducive for achieving this goal, according to the fishermen

Updated - June 25, 2024 07:01 pm IST

Published - June 25, 2024 06:57 pm IST - THOOTHUKUDI

Readying for the haul: Owners of mechanised fishing boats in Thoothukudi say they spend ₹85,000 to ₹1 lakh for making each net which can be used for only 30 to 35 fishing days.

Readying for the haul: Owners of mechanised fishing boats in Thoothukudi say they spend ₹85,000 to ₹1 lakh for making each net which can be used for only 30 to 35 fishing days. | Photo Credit: N. RAJESH

Owners of mechanised boats and fishermen feel let down by the Central government as the Finance Ministry has ignored their longstanding plea for giving waiver to components being used for making fishnets, including nylon twines, ropes and floats.

After the recent GST council meeting, Finance Minister Nirmala Sitharaman proposed to reduce the GST rate on electronic appliances, paint and varnish, storage water heaters, watches, X-ray films for medical use, curd and buttermilk, kitchenware and toilet articles, hair oil, soap, toothpaste, mobile phone, refrigerator and washing machine. Particularly, the 31.30% GST slapped on mobile phones, refrigerators and washing machines has been brought down to 18%.

 However, the fishermen’s longstanding demand for GST waiver for components being used for making fishnets has gone unheard even though India is one of the world’s biggest seafood exporters and the seafood export is vital for the Indian economy.

Taxes being levied on fishnets and products being used for making fishing boats is not favourable for seafood export sector, the fishermen feel. India exported 1.30 million tonnes of marine products to southeast Asia, USA, Europe and the Middle East - all worth 8.66 billion USD in 2022 – 23, and shipped 1.70 million tonnes of seafood worth 7.38 billion USD in 2023 – 24 despite various challenges. Target has been set to take this to 14 billion USD by 2025.

But the taxation policies are not conducive for achieving this goal, the fishermen say.  GST of 12% is slapped on twines being used for making fishnets, 12% for ropes connected to the fishnet, 18% for floats, rubber balls connected to the nets, fishnet basket and chains, and 5% on fishnet weight.

Beno, a mechanised boat owner of Puthu Theru, Thoothukudi, says, “Using them we prepare 35-metre-long fishnets. Since one kg of twine costs ₹400, we spend around ₹40,000 for twine alone. We spend ₹85,000 to ₹1 lakh for making a full-fledged fishnet. We take five or six nets for fishing as we need spare nets if the first net gets damaged during trawling after getting entangled around the rocks. So, every boat owner will have to invest at least ₹6 lakh for fishnets alone. The high cost is all due to the GST on twines and other materials. Considering the risky vocation and to boost seafood export, GST must be waived for twine and the other components.”

 Antony Dhanapaul, another boat owner, says, “Even after investing heavily on the fishnets, each net will last for only 30 to 35 fishing days. In other words, we have to invest up to ₹50,000 on every 35th day for buying twines. GST waiver will be a great relief for us.’

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