Ahmedabad: In a major relief to isabgol traders, farmers as well as processors in Unjha, GST Council on Thursday recommended a nil GST rate on psyllium seeds, irrespective of whether they are fresh, chilled, frozen or dried. Unjha in north Gujarat is one of the world’s key hubs for isabgol trade.The recommendation is expected to ease the uncertainty at Unjha APMC, where trading of isabgol had remained suspended since July 26 over a dispute concerning the applicable GST rate. Trading resumed partially in early Oct, but traders remained cautious pending a uniform decision from the Centre.Ashwin Nayak, president of Isabgol Processors’ Association (IPA), said the decision was a major relief for processors and traders. “Trade remained halted for over two months, significantly affecting production and export commitments. The decision of the Rajasthan Authority for Advance Ruling had created considerable confusion. We are grateful to the state finance department, Unjha APMC and Delhi tax research unit for representing the issue before the ministry,” Nayak said.The dispute began after Gujarat’s Authority for Advance Ruling, in an order dated May 29, held that psyllium seeds supplied in their natural, raw and unprocessed form and procured directly from farmers through APMC auctions qualified as “fresh” isabgol and were exempt from GST.However, a subsequent ruling in Rajasthan held that isabgol seeds stored in mandis or warehouses could be treated as dried and attract 5% GST. The conflicting interpretations created uncertainty for traders operating across Gujarat and Rajasthan.Sources in Unjha said the impact of the two-month disruption on prices would become clear only after trading normalised. “If stockists enter the market following the nil tax recommendation, prices could rise. It will depend entirely on supply,” a source said.According to Unjha APMC estimates, isabgol seeds currently sell for Rs 2,700 to Rs 3,200 per 20kg.The deadlock had brought auctions at Unjha APMC to a halt. More than 20 processing units had shut by late Aug, while processors warned that a prolonged disruption could hurt the export-oriented industry.India supplies about 90% of its isabgol output to the US and Europe, according to IPA.By Oct 6, trading had resumed partially, with only around 20% of traders participating. Traders holding GST-paid stocks from Rajasthan remained reluctant to restart operations because of concerns over tax scrutiny.
