Farmers and entrepreneurs involved in the procurement and processing of Isabgol in Rajasthan are troubled by the different GST rates applicable in Gujarat and Rajasthan.
In Gujarat, there is a decision of 0% GST on natural, raw, and unprocessed Isabgol seeds, whereas a 5% GST has been imposed on Isabgol seeds kept in mandis and warehouses in Rajasthan. The association says that due to this disparity, the procurement and auction of Isabgol in the state’s mandis are being affected.
The Rajasthan Isabgol Processors Association has demanded that the state government raise this issue in the 57th GST Council meeting to be held in New Delhi on 12 September.
The association has also demanded the implementation of a uniform 0% GST on natural and raw Isabgol seeds across the country. Rajasthan accounts for more than 75% of the country’s total Isabgol production, and as such, this is having a direct impact on the industry and farmers.
Trouble increased due to different decisions in Gujarat and Rajasthan
Association President stated that in the Gujarat AAR’s decision dated 29 May, 2026, natural, raw, and unprocessed Isabgol seeds were considered fresh, and zero GST was applied.
Conversely, in the Rajasthan AAR’s order dated 27 July, 2026, Isabgol seeds arriving for auction in mandis and APMCs, as well as those stored in warehouses and sheds, were considered processed/dried, and a 5% GST was imposed. This is affecting procurement in Rajasthan’s mandis.
90% of Isabgol is exported; working capital is getting stuck in GST refunds
General Secretary said that Isabgol seeds naturally absorb moisture from the environment. Storing them in a mandi or warehouse cannot be considered drying or processing.
About 90% of Isabgol is exported from Rajasthan. Exporters receive GST refunds, but the cash flow of processing units is being affected as working capital gets stuck in these refunds.
Demand for uniform GST across the country
The association has demanded that a uniform zero GST rate be recommended across the country on natural and raw Isabgol seeds purchased from APMC.
Furthermore, until clarity is provided by the GST Council, the Rajasthan GST Department should not implement the controversial AAR ruling, and the auction and procurement process of Isabgol in the mandis should be normalized.
The association states that if the 5% GST continues in Rajasthan, there is a risk of processing units shifting to Gujarat, which will impact mandis, transportation, storage, and employment.
