New Delhi, Oct 24 The GST reforms will give significant benefits to Karnataka's farmers cultivating coffee, dairy, and cashew to artisans engaged in handlooms and handicrafts, and entrepreneurs driving industrial and technological growth, the government informed on Friday.
Tax cuts will lower costs, expand market access, and improve margins for farmers, artisans, and strengthen the competitiveness of MSMEs and exporters, an official statement said.
Tax reforms reduce prices on coffee extracts, instant coffee, UHT milk, paneer, ghee, butter, processed cashew nuts, coir products, and processed fish, with estimated retail price drops of 5–12 per cent based on the product.
Karnataka is responsible for approximately 71 per cent of India’s coffee production in Kodagu, Chikkamagaluru, and Hassan. Tax reforms could cut retail prices by 11–12 per cent and enhance margins for small processors and cooperatives.
Removal of GST on UHT milk and paneer and a reduction from 12 per cent to 5 per cent on ghee and butter, are projected to reduce retail prices by 5–7 per cent. These changes will enhance cooperative margins and support the livelihoods of approximately 26 lakh milk producers associated with the Karnataka Milk Federation, the statement said.
Coastal cashew processing hubs in Dakshina Kannada and Udupi will see a reduction in processed cashew nut prices from 12 per cent to 5 per cent, resulting in a 6–7 per cent price cut that will benefit thousands of women workers.
The GST reduction from 12 per cent to 5 per cent on coir mats, rugs, and geotextiles is expected to make them 6–7 per cent cheaper, boosting competitiveness against synthetic alternatives, the statement noted.
Canned tuna, frozen shrimp, and ready-to-eat fish curries are around 6–7 per cent cheaper due to GST reforms, boosting value addition within the fisheries value chain.
Rate cut on agricultural machinery will significantly reduce the cost of farm mechanisation. GST rejig will also strengthen Karnataka’s export-oriented garment clusters, improve women’s employment, and stimulate demand across the textile value chain, from spinning to apparel production.
Other segments that are expected to benefit from GST reforms include Mysore Rosewood inlay art, Bidriware, one of India's finest metal handicrafts, Ilkal and Udupi handloom sarees, the granite industry, cement, and drones.
The GST reforms lower the cost of domestically manufactured drones by 11–20 per cent strengthening Karnataka’s position as a leading centre for drone innovation and enhancing competitiveness against imports.
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