GST Rate Cuts: Empowering Kerala’s Economy from Spices to Seafood
The recent GST reforms, which include substantial rate reductions (mostly from 18% or 12% down to 5%) across key products, are designed to boost Kerala’s traditional economy by improving affordability, enhancing export competitiveness, and strengthening local livelihoods.
Key Sectoral Gains from Tax Rationalization
- Plantation and Agro-Processing (18%/12% to 5%):
- Spices and Coffee: GST cuts on instant coffee, preparations, and value-added spices like Malabar Pepper and Alleppey Green Cardamom (extracts and masala mixes) reduce costs by approximately 11%. This strengthens global competitiveness for these GI-tagged products.
- Cashew and Fruits: Reduction in GST on cashew processing and processed items like Vazhakulam Pineapple pulp/jam lowers costs by 6–11%, directly benefiting the Kollam cashew corridor and food processing units.
- Marine and Cottage Industries (18% to 5%):
- Seafood Processing: The GST cut on processed fish and seafood products aids the coastal economy, enhancing export competitiveness and supporting the livelihoods of over 1 million fisherfolk.
- Coir Sector: Reduction in GST on coir products (including mats and geotextiles) down to 5% is expected to reduce costs by approximately 11%, boosting exports and securing jobs for over 3.7 lakh workers, 80% of whom are women.
- Tourism and Wellness (18%/12% to 5%):
- Ayurveda & Tourism: GST on Ayurvedic drugs, devices, and products has been reduced. For the hospitality sector, hotels and homestays with tariffs up to ₹7,500 are now taxed at 5% GST. These measures aim to enhance Kerala’s appeal as a globally competitive destination for tourism and traditional healthcare.
Economic Impact
The reforms are expected to ensure that the economic benefits reach smallholders, cooperatives, and MSMEs across Kerala, revitalizing traditional strengths and strengthening income stability across the state.
Source :- From-Spices-to-Seafood-GST-Reforms-to-Boost-Keralas-Economy