The tax on agarbathi under the Goods and Services Tax (GST) is now being dubbed as “Puja tax”. For, the GST, which will be rolled out on July 1, has included agarbathi in the 12% tax bracket. This is expected to make incense sticks dear by 15% for the consumer.
Till now, agarbathi enjoyed 0% VAT and excise duty in many States. In some States, however, it was charged a low VAT.
“The 12% GST on agarbathi will affect the industry gravely. Agarbathi is used by the common man who will now be impacted by the higher tax. Most of the agarbathi manufacturers are cottage and village units, and many jobs and livelihood of women who roll agarbathis will be under threat,” Indian Agarbathi Manufacturers’ Association president Sarath Babu told presspersons here on Wednesday. Most of the agarbathi manufacturers follow the cottage industry model that generates employment to a large number of people in rural India, he added.
Mr. Babu said, “The 12% GST on agarbathi is inconceivable while other puja items enjoy 0% tax. If the industry cannot be given 0% rate, it can be brought in the 5% bracket at least.”
Association representatives met senior officials in the Finance Ministry on Tuesday to plead their case. According to industry estimates, the ₹5,000-crore agarbathi industry is split between about 700 manufacturers — having about 50% market share — and the unorganised sector.
Terming the 12% rate on agarbathi as “puja tax”, association vice-president Arjun Ranga said an estimated 25 lakh people are employed directly or indirectly by the industry, and higher tax would affect those dependent on the industry drastically.
