Goods and Services Tax (GST) reforms and implementation : An economic analysis in the marine fisheries sector of Kerala, South India

Abstract

Goods and services tax (GST), hailed as a historic tax reform, is a step taken by Government of India to improve transparency and accountability in the taxation system of our country. The fisheries sector is also expected to have a varied impact consequent to the introduction of these reforms. The present study assessed the level of awareness and perception of impact of GST and to estimate the additional cost per annum in marine capture fisheries sector of Kerala due to implementation of GST and also to highlight the possible positive effects of inclusion of diesel price under GST. The study was undertaken in the fish landing centers/harbours of Alappuzha and Ernakulam districts of Kerala, south India aimed at measuring the extent of uncertainty generated by introduction of GST. The study revealed that the implementation came as a complete bolt from the blue with majority of the fishers in disagreement with the process of implementation of GST without taking all stakeholders into confidence. Compared to value added tax (VAT), the GST and post-Guwahati Council GST rates are found to be high, affecting the fishing community at multidimensional levels. The results revealed that the marine capture fishing operations across all sectors in Kerala will be incurring an additional cost of `171.25 million per year due to GST introduction. However introducing GST on fuels will lead to a reduction of diesel price by 30-40% and 25-30% at 18 and 28% GST slabs respectively, which would reduce the ever increasing cost of fishing. The study also advocates that the implementation of GST in fuel prices should not add to overexploitation of the already dwindling fisheries resources.