July 1, 2017 2:57:41 am
A few hours before the roll out of Goods and Services Tax (GST), the GST Council reduced the tax rate on fertiliser from previously decided 12 per cent to 5 percent. “The GST Council in its meeting today addressed the concerns raised by various states over tax imposed on the fertilizers. After consensus, we have decided to bring the price down to five per cent,” said Arun Jaitley, Minister of Finance, after chairing the 18th GST Council meeting at Vigyan Bhavan in New Delhi. Till June 30, taxes on fertilisers were in the range of 0-6 per cent in different states, but with this Council decision, a uniform 5 per cent will be effective from July 1.
Jaitley said the decision to reduce the tax rate on fertiliser was taken because of apprehensions that price of the crop nutrient may go up. In another move related to farmer’s relief, the GST Council, which comprises of representatives of each and every state, decided to cut tax rate on exclusive parts of tractors from 28 per cent to 18 per cent. The GST Council meeting was called as a thanks giving meet with no formal agenda. However, understanding the sensitivity of issues related to farmers, the Council decided to take some decisions. The fertiliser industry had been making several representations to the Ministry of Chemicals and Fertilisers for revision in the GST stating that a high rate of 12 per cent would upset farmers as it can increase their cost of production.
Ultimately, the fertiliser ministry took up the issue with the finance ministry, which then decided to put the proposal before the GST Council. On Friday, Prime Minister Narendra Modi attended a dinner for the GST Council members as a special thanks giving for the decisions the panel took since its formation in September last year. Since its first meeting on September 23, 2016, the Council has met 18 times and decided on range of issues — from drafts of supporting legislations to GST rules, rates of taxes and fitting over 1,200 goods and services in the four-tire structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent.
Jaitley said the Council meeting also approved additional set of rules. He did not elaborate on the issue. The GST, which unifies more than a dozen central and state levies like excise duty, service tax and VAT, was implemented at midnight. After Council’s announcement, Union Chemicals and Fertilisers Minister Ananth Kumar said that fertiliser prices will come down marginally with GST rate being slashed to 5 per cent from 12 per cent., he added. “The reduced GST rate will bring down burden on farmers by Rs 1,261 crore… Prices of urea, DAP, MoP, and mixed fertilisers will come down marginally,” he said.
Subscriber Only Stories
The GST council did not reduce the rate of 18 per cent on crop protection chemicals. On Friday, CropLife India, a consortium of 14 agrochemical firms operating in India, demanded that the government reduce the GST rate of 18 per cent on crop protection chemicals, saying the high rate will burden farmers. Rajshekhar Sakhalkar, Director of CropLife India, said that GST introduction has left farmers “confused and worried” despite a good monsoon.
📣 Join our Telegram channel (The Indian Express) for the latest news and updates
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.