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Assocham seeks review of GST rates for specific agriculture inputs

Higher GST on bio-fertilisers and organic manures will directly promote chemical usage and impact public health, Assocham has written to Union Finance Minister, Arun Jaitley

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Industry body, Assocham has urged the Union Government to review GST (Goods and Services Tax) rates for select agriculture inputs such as bio-fertilisers, bio-pesticides/bio-control agents (BCA), organic manures/ vermicompost/ farmyard manure (FYM) among others.

“Higher GST in this segment will directly promote chemical usage thereby leading to increase in greenhouse gas emissions, besides it will also adversely impact public health,” highlighted Assocham in a communication addressed to the Union Finance Minister, Arun Jaitley.

It also noted that such a taxation policy on these segments will directly contradict efforts being made by Prime Minister Narendra Modi in promoting variety of schemes and projects such as Swachh Bharat, Soil Health Card, Namami Gange and various organic missions.

“The GST Council has recommended far higher tax rates to certain specific manufactured products that are exempted in several states like West Bengal, Sikkim, Uttarakhand and others or attract the basic five per cent VAT (Value Added Tax) charges in majority of states,” said DS Rawat, Secretary General, Assocham.

Highlighting the importance of bio-fertilisers, the chamber in its representation said that they are manufactured primarily by micro, small and medium enterprises (MSMEs) and also provide farmers an option towards sustainable agriculture practices like organic farming.

Besides, bio-fertilisers are highly beneficial as they are alternate solutions to farmers from use of chemical fertilisers that tends to spoil both soil and environment.

“While the bio-fertilisers have so far been left out of tax ambit by majority of states including West Bengal, even the NABARD (National Bank for Agriculture and Rural Development) provides additional support to this sector in the form of 50 percent subsidy for setting up such units,” said Rawat.

Just like bio-fertilisers, the bio-pesticides/ bio-control agents are also used extensively for organic farming and integrated crop management practices.

The Government of India is promoting use of these beneficial micro organisms in various schemes for agriculture and allied sectors though their adaptability is very low.

The Assocham representation to the Finance Minister also highlighted that presently, bio-pesticides/ bio-control agents are taxed in bracket of 5-6 per cent by majority of states but on the basis of their certifications they are exempt from paying excise and other taxes.

Similar to the bio-fertilisers’ segment, they are also provided subsidy and other benefits for setting up such plants.

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