<p>Sales hurt by increased imports of kernels, higher raw nut prices and confusion over taxation Local cashew processors have seen a nearly 20 per cent fall in sales this Diwali season from last year, hurt by increased imports of kernels, higher raw nut prices and confusion over taxation. "There has been a spike in the import of cashew kernels.Though import carries a duty of 45 per cent, cheaper rates (abroad) have led to its rise," said RK Bhoodes, chairman of the Cashew Export Promotion Council of India.</p> <p>Kernels are currently imported in both whole and broken forms. "It is profitable as the selling price is higher in India," Bhoodes said. More imports are happening in broken cashews which are largely absorbed by the confectionary industry, he added.In India, retail cashew prices have moved up around 10 per cent in the past to Rs 800-820 per kg now. Impleyear to mentation of goods and services tax had also hit the traders early on, though the situation has improved since.GST on cashew was initially fixed at 12 per cent, compared with a 5 per cent tax levied on the commodity before the new system came into effect on July 1.</p> <p>This created a confusion in the market, leading to a delay in stocking by traders. GST on cashew was subsequently brought down to 5 per cent on the request of the industry.Also, traders are yet to move fully into the GST system, said K Prakash Rao, managing partner of Kalbavi Cashews. "While the overall sales lower than last year, the demand for premium quality nuts has not waned," Rao added.Another reason for higher retail prices this year is the rise in the cost of imported raw nut, traders and processors said. Costly raw nuts caused a 20 per cent drop in their imports to 7.70 lakh tonnes in 2016-17.</p> <p>The cashew industry has called for the scrapping of a 5 per cent duty charged on shipments from Ivory Coast, Ghana and Nigeria, which account for a major share of imports."Our domestic production of around 7 lakh tonnes and a part of import go for processing for internal consumption. As sufficient nuts are not available, 40 per cent of the (processing) capacity is lying idle," Bhoodes said.</p>