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Minister requests GoI to exempt GST on agriculture products

In his recent meeting with the Indian foreign secretary Vijay Keshav Gokhale, foreign minister Dr Tandi Dorji raised the issue of the impact of Goods and Services Tax (GST) on cardamom.

“When I was at a meeting the foreign secretary, I requested him to reconsider exemption of GST for our agriculture products produced,” lyonpo told Kuensel. “We hope to get this cleared as fast as possible.”

With export of cardamom to India coming to a halt, affected farmers, exporters, BAFRA and department of trade (DoT) are currently waiting for a notification the Indian government recently issued with regard to this problem. The agencies are in touch with the Bhutan Embassy in New Delhi, India for this.

The notification is an outcome after the issue was brought up at two bilateral meetings in May and September this year.

After the GST was imposed since July 1 last year, Indian customs offices have implemented the computerised system called ICEGATE in Indian towns that share border with Bhutan.

ICEGATE system asks exporters clearance from the Plant Quarantine Services of India (PQSI). PQSI does not issue this clearance for Bhutan and it also does not recognise Bhutan Agriculture and Food Regulatory (BAFRA) certification the exporters get in Bhutan. This has halted official export.

After this issue was brought to notice by exporters, BAFRA also informed the Indian Embassy, Thimphu, an official said. Owing to the urgency of the issue, the Bhutanese side also requested Indian government through diplomatic channel for their positive consideration on the recognition of BAFRA certification.

“As an immediate intervention to respond to the situation on the ground, the DoT and BAFRA have been in constant touch with the Royal Bhutan Embassy to follow up on the issue,” BAFRA official said.

“Currently MoAF is organising a visit to New Delhi, comprising of officials from DoT and BAFRA to carry out a technical level consultation meeting on the Issue.”

Meanwhile, some cardamom exporters in Samtse are shocked after the export was stopped about a week ago. Even illegal transactions are not being done, exporters confirmed.

Shivaraj Ghalley, an exporter said export to India has totally stopped.

“We used to still export from Jitti border,” he said, adding that buyers wouldn’t take the spices anymore. “They say they require some documents and they are fined heavily for not having such documents.”

He said farmers and exporters have stocks at homes, including stocks of the previous years. “If this continues, cardamom price would fall to half the price,” he said.

Narey, a farmer said that buyers are not buying.  “They say police do not allow without proper documents,” he said. “I don’t know what is happening.”

In Phuentsholing, cardamom is still being traded illegally. However, price has further dropped.

Singye Wangdi, an exporter said it is the middlemen that are meddling the price.

“Price ranges from Nu 400 to Nu 450 a kg in Phuentsholing,” he said, adding that it was manipulated considering the prices in Gelephu and Samtse.

Rajesh Rai | Phuentsholing

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