Ahead of the Goods and Services Tax (GST) council meeting on Thursday, a high-level committee in its report on doubling of farmers' income (DFI) by 2022 has asked the Government to reconsider the rates of GST on several items in agriculture sector. The report follows the demand by Agriculture Minister Radha Mohan Singh that the GST rate on irrigation equipment should be scaled down to 5 per cent from the existing 12 per cent.
“There is need for a relook in to the rates of taxes imposed on some of the inputs like items used in drip irrigation, protected cultivation, and smaller hand held implements. Soil-corrective items like lime and gypsum, water soluble fertilizers,
bio-fertilisers, bio-pesticides/bio-control agents (BCA), organic manures, vermin compost, farmyard manure and others even though put up in unit containers and bearing a registered brand name,” a panel headed by senior IAS officer Ashok Dalwai said in his report “Production Enhancement through Productivity Gains.”
The report is the eighth in the series of 14 volumes to suggest ways to double the farmers' income by 2022.
According to the report, higher GST on bio-fertilisers and organic manures may directly promote chemical usage and impact public health. “The inputs used in horticulture sector should be made available to the growers at affordable prices for better profits. The implementation of GST in the country has brought in public outcry in the farming sector,” the report said. To improve the economic condition of farmers, Prime Minister Narendra Modi had set up the high-level committee in 2016 to suggest ways to double farm incomes.
Sources in the Ministry of Agriculture said that Dalwai committee has also taken note on higher GST rate on agri-sector items. The Agriculture Ministry has already taken up the issue of bringing down GST rate on drip irrigation equipment with the finance ministry.
According to sources, the focus of the Government will be on this segment in the upcoming budget.
Since the Centre wants to focus on drip irrigation techniques to support agriculture practices in India, there is need to reduce GST rate on items like sprinkles and nozzles from 12 per cent to five per cent, an official said.
“Under GST regime , some of pesticides, harvesting and threshing machineries, milking and dairy machines, poultry keeping, bee keeping, germination plant, tractor, composting machine, self loading or self unloading trailers for agriculture
purposes, agricultural and horticultural or forestry machinery for soil preparation or cultivation attract 12 per cent GST, is also expected to come down to 5 per cent,” sources said.