High GST hits Ayurveda medicine industry hard

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Source: thehindu.com

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Industry for 5% tax for classical Ayurveda medicines

The Ayurveda medicine industry, which is already in crisis due to escalating prices of raw materials, has been badly hit by the increase in GST. Post-GST, all Ayurveda medicines have been included in the 12% tax bracket, a steep hike from 5%.

“Scientifically manufactured Ayurveda classical products such as Kashayam, Kuzhambu and oils have already become unaffordable for the common man because of the rise in the price of raw materials,” said D. Ramanathan, general secretary, Ayurveda Medicine Manufacturers Organisation of India (AMMOI).

The price of coconut oil is ₹160 a kg, jaggery costs ₹58 a kg and Athividayam (Athivisha) is priced at ₹10,000. A kilogram of Kurunthotti, another important ingredient, cost ₹140.

The manufactures, already in loss, are left with no other option but to increase the price, Dr. Ramanathan said. There are two types of products in Ayurveda medicines. Classical or generic products, such as Kashayam, Kuzhambu and oils, and patented products. Most beneficiaries of classical Ayurveda medicines are rural masses and poor people, he said.

“According to statistics released by the Ayush Department, only 7% people of the country uses classical Ayurveda medicines. Of the ₹10,000-crore Ayurveda medicine industry, classical medicines constitute only ₹3,000 crore. The rest are patented products. The GST council, which has reduced tax for incense stick, ornaments, and even decorative items, refused to slash the GST for classical Ayurveda medicines even after repeated pleas from the Ayush Department and the Kerala government,” Dr. Ramanathan noted.

Of the 600 Ayurveda medicine manufacturing units, 380 are on the verge of closure because of high manufacturing costs and less profits.

The situation becomes all the more difficult for the highly labour-oriented industry with fluctuating prices of raw materials, the AMMOI noted.

Meet on Sept 23

So the AMMOI urged the State government to press the GST council, which will convene its next meeting on September 23, to bring the classical Ayurveda medicines to the lowest GST bracket of 5% for the survival of the industry and for the benefit of common man.

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