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Govt Acts on Farmers' Call, GST on Fertilizers Reduced From 12% to 5%

In a last minute correction before the launch of Goods and Services Tax (GST), the GST Council has decided to reduce tax rate on fertilizers from 12% to 5%. Similarly, GST rate on exclusive parts of tractors has been reduced from 28% to 18%.

News18.com

Updated:June 30, 2017, 8:57 PM IST
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Govt Acts on Farmers' Call, GST on Fertilizers Reduced From 12% to 5%
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New Delhi: In a last minute correction before the launch of Goods and Services Tax (GST), the GST Council has decided to reduce tax rate on fertilizers from 12% to 5%. Similarly, GST rate on exclusive parts of tractors has been reduced from 28% to 18%.

This comes in the wake of protests by farmers’ organisations which had termed GST rates draconian and anti-farmer.

Earlier, News18 spoke to economists and farmer leaders who had expressed hope that the GST Council will reduce GST on fertilizers.

Abhijit Sen, a former member of the Planning Commission whose charge was Agriculture, had said GST will increase the cost of agricultural inputs. “It is clear that the tax rate on the two main inputs – machinery and fertilizers – will go up, but it is not clear what happens to the maximum retail price (MRP). Will it get subsumed in the GST?”

Chengal Reddy, an advisor to the Consortium of Indian Farmers had said, “The government is saying that things will eventually get better after the first few months, but we have absolutely no confidence in politicians.”

Under GST, agricultural commodities like grain, fruits, vegetables and milk will not be taxed. This should reduce prices, providing some relief for consumers.

The government on Friday also said that total sown area as on June 30 stands at 222.30 lakh hectare, compared with 187.03 lakh hectare at this time last year.

Rice has been sown in 38.93 lakh hectare, pulses in 18.80 lakh hectare, coarse cereals in 38.12 lakh hectare, sugarcane in 47.52 lakh hectare and cotton in 46.10 lakh hectare.


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