The GST Council has recommended a nil GST rate on isabgol, or psyllium, seeds in all forms, offering relief to traders, farmers and processors at Gujarat’s Unjha APMC after a tax dispute disrupted auctions and processing activity for more than two months.
The recommendation covers psyllium seeds whether fresh, chilled, frozen or dried. Unjha, in north Gujarat, is one of the world’s key centres for isabgol trading and processing. The decision is expected to remove the immediate uncertainty that had kept many traders from restarting operations at full capacity.
Trading at Unjha APMC was suspended on July 26 after conflicting interpretations of the applicable GST rate. Activity resumed partially in early October, but traders remained cautious while waiting for a uniform decision from the Centre. By October 6, only about 20% of traders were participating in the market, according to the report.
The dispute followed two different rulings. 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. A subsequent ruling in Rajasthan said 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, particularly those holding stocks on which GST had already been paid in Rajasthan. Such traders remained reluctant to restart operations because of concerns over possible tax scrutiny.
Ashwin Nayak, president of the Isabgol Processors’ Association, said the disruption had significantly affected production and export commitments. He credited the state finance department, Unjha APMC and the Delhi tax research unit with representing the issue before the ministry, and described the recommendation as a major relief for processors and traders.
The disruption also affected processing capacity around the market. More than 20 processing units had shut by late August, while processors warned that a prolonged stoppage could damage the export-oriented industry. The Isabgol Processors’ Association said India supplies about 90% of its isabgol output to the United States and Europe.
Unjha APMC estimates show that isabgol seeds are currently trading at Rs 2,700 to Rs 3,200 per 20kg. Sources cited in the report said the effect of the disruption on prices would become clear only after trading normalises. Prices could rise if stockists return to the market, but the outcome would depend on available supply.
The GST Council’s recommendation provides a proposed uniform tax position, but traders’ operations and prices will depend on the formal notification and the return of market participants. Unjha APMC is expected to monitor the restoration of regular auctions as the new tax position moves through the Centre’s implementation process.
