Achhe din elusive for Ayurveda

High GST rates disappoint the sector

Tax on ayurvedic medicines to go up from 7% to 12%; Ayurvedic FMCG products to attract 28% GST

Hyderabad: With Prime Minister Narendra Modi leading from the front in encouraging yoga and traditional medicines in the last three years, many Indians firmly believe till now that the ancient healthcare practice of Ayurveda will get a fillip during his tenure and beyond. But they will have to change their viewpoint now as all the ayurvedic medicines and products will be expensive once the much-awaited Goods & Services Tax (GST) comes into play from July 1.

According to GST rates finalised by all powerful GST Council earlier this month, all ayurvedic medicinal products will attract 12 per cent tax in the upcoming ‘one-tax-one-nation’ regime against the current tax incidence of 7 per cent, including VAT, while Ayurveda-based FMCG products will be taxed at 28 per cent against the existing cumulative tax rate of 15-16 per cent.

Interestingly, homeopathic products are slotted in 5 per cent tax slab. “We expected the Central and state governments to encourage ayurvedic products by reducing tax rates under the GST. Instead, they increased tax rates. It came as huge jolt for the people who use ayurvedic products and also for the companies like ours which make them,” Ramesh Viswanathan, Managing Director of Hyderabad-based Vishal Personal Care Private Limited, told The Hans India. The company manufactures and markets Ayurveda-based personal care products under Banjara’s brand.

It has an AYUSH-certified manufacturing plant on the city outskirts. According to him, the high tax rates under GST will cripple Ayurveda sector in the country. “We have to increase prices by at least 10 per cent to offset the tax hike. That will drive away people from the products whose consumption provides holistic care and cure for common man at an affordable price,” he explained.

Patanjali Ayurved led by yoga guru Baba Ramdev also found fault with the government for trying to impose higher taxation on ayurvedic products. In a similar vein, industry body AMAM also said that while the government is aggressively promoting Ayurveda globally, high tax incidence under GST will make the natural medicines costly and out of reach of the common people back home.

GST rate for classical or generic range of ayurvedic medicines must be nil and 5 per cent for patented products instead of the proposed 12 per cent, the Association of Manufacturers of Ayurvedic Medicines (AMAM) has said. "Higher GST on ayurvedic category has surprised us and is very disappointing and disheartening," Patanjali Ayurved Ltd and Patanjali Yogpeeth spokesman S K Tijarawala said.

He further said Ayurveda, which is ancient and proven therapy for ages, doesn't deserve such treatment. "Good health and healthy living is common man's basic right and expectation. Without all these, how can one feel and live 'achhe din'?" he asked. Tijarawala said the world is now looking forward to Indian Vedic knowledge of Ayurveda and his company has created new potential of over Rs 1 lakh crore market for such natural and healthy products. "We have created a lead being followed by so many other companies.

This has opened new avenues of self employment generation in field of herbicultutre, agriculture, Ayurved practitioners, naturopathy, Ayurveda product manufacturing," he observed. Echoing similar sentiments, AMAM general secretary Pradeep Multani said: "The Indian government has been aggressively promoting ayurvedic products internationally but what's the point of doing these things when the tax rate is so high and the common people can't afford it at home?"

He further said: "This is sad and unfortunate as the Prime Minister is doing his best to boost the AYUSH system." AYUSH stands for Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy.

The previous UPA government treated Ayurveda industry as step child but this government has taken steps to take it forward, Multani said, however, adding the high tax rate proposed under GST "will make ayurvedic, sidha and unani medicines out of reach of common man and kill the system". He said if homeopathic products could be put under 5 per cent slab under GST, ayurvedic products should also be kept under the same rate.

By P Madhusudhan Reddy