Odisha CM urges Nirmala Sitharaman to eliminate GST on Kendu leaf

The chief minister of Odisha, Naveen Patnaik, on Saturday urged the union finance minister, Nirmala Sitharaman, to take into consideration eliminating the center-levied goods and services tax (GST) on Kendu leaf in the state because it was negatively impacting trade and the livelihoods of locals who depended on it.

In a letter to the finance minister, who also heads the GST council,  Patnaik requested that the 18% GST on Kendu leaf be rolled back in the greater interest of the state of Odisha as lakhs of people associated with the trade are getting affected.

“The tribal people collect the leaves as part of their right defined under Scheduled Tribes (ST) and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006. They have the right to procure and sell these products,” said Patnaik.

“The imposition of GST of 18% on Kendu leaves is adversely affecting the trade. This in turn affects the livelihoods of Kendu leaves pluckers, binders & seasonal workers and the implementation of the social security and welfare schemes for them. In the interest of the livelihoods of the community it is urged upon to withdraw the imposition of GST on Kendu leaves for the greater interest of the state of Odisha,” wrote Patnaik.

Patnaik said as Kendu, a minor forest produce, is the financial backbone of about 8 lakh leaf pluckers, binders and seasonal workers, most of whom belong to the tribal community and poorest sections of Odisha, the imposition of GST on the item has a negative impact on the implementation of welfare schemes.

Kendu leaves were subject to a 5% VAT in Odisha prior to the introduction of the GST. Following the introduction of the GST in July 2017, Kendu leaves are now subject to an 18% GST, comprised of 9% central GST and 9% state GST. Due to the hefty tariff, the traders who win the bid from the Odisha Forest Development Corporation to gather Kendu leaves pay the tribals who are harvesting the leaves even less.

On Wednesday, the chief minister of Odisha announced a special package for the welfare of the 8 lakh people who pick Kendu leaves and other members of the trade.

This development follows the approaching assembly by-election in the Bargarh district’s Padampur next month.

Patnaik said ₹1,000 will be given to each plucker and ₹1,500 to each seasonal staff and binders in the first phase.