Farm mechanisation must: CICU

Value addition for them is very low and they are passing through vicious circle of low profit due to low investment in technology and shortage of labour which are proving to be counterproductive for their growth and development.

Although there is no value added tax and central excise duty on agricultural machinery,both these taxes are payable on 70-80 per cent of raw materials that are used for their manufacturing. For example,for agriculture machinery of Rs 50,000 comprising of 70 per cent raw-materials costing Rs 35,000,a central excise duty and state value added tax of Rs 6,059 come to be payable.

In this manner,farm machinery is being indirectly taxed making it a costly proposition for adoption by farmers.

Easy availability of low cost agricultural machinery would make enormous contributions to revitalise and encourage farmers to enhance productivity by adopting cheap and innovative technologies.

To achieve this goal and also to solve the problem of labour shortage,there is an urgent need to provide low cost raw material to the agricultural manufacturing industry.

Such support would encourage manufacturing companies to plan adequate marketing strategies to reach out to farmers for use of low cost affordable machinery for efficient production and to reap higher profits.

Chamber of Industrial & Commercial Understandings members stated that they urge the Central and Punjab governments to refund the central excise duty and VAT on raw materials used for the manufacture of agricultural machinery.

Such a gesture would lead to the availability of agricultural machinery at nominal cost to farmers,which would greatly help them in opting for mechanisation and address the issue of food shortage as well.