The new Goods and Services Tax (GST) regime has started taxing tendu leaves, with a centralised tax imposed on it for the first time.
Tendu leaves are used for beedi making, and is a Minor Forest Produce (MFP). For the tribals in central India, it is a financial lifeline.
Now the leaves will attract 18% tax — 9% Central GST and 9% State GST. Earlier it attracted only sales tax (VAT), which was, for instance, 5% in Odisha, 5.5% in Rajasthan.
The increase is to affect thousands of tribal who would see a reduction in the prices they are paid by buyers. This will also reduce revenues of Gram Sabhas who are paid profits during sale by state corporations.
There is also a confusion as to if the tax on MFPs itself is contrary to the provisions of the Forest Rights Act. According to Down To Earth magazine, the Tribal Co-operative Mareting Development Federation of India (TRIFED), in charge of marketing tribal products, is yet to have a clarity on the issue.