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Though people long back started shifting towards urban areas in search of occupation, other than agriculture, which yields more money. But agriculture is still in existence as one of the biggest sectors of the Indian economy. Almost 70 per cent (including the figure of disguised unemployment) of Indian population depends on agriculture, but the agricultural income is very low and the sectoral contribution towards the GDP is very less compared to industry and services.
The Goods and Services Tax (GST) is indeed carrying a great news with it for the farmers, who by putting all their efforts feeding the country for years, that the Government has done away with the payment of taxes on the agricultural income and the status quo is more likely to be maintained when the GST comes into effect from July 1. However, the Government needs to tighten the noose of the agri-business industries that are benefitting under the garb of agriculture.
At one hand where the Government has done away with the payment of taxes on the agricultural income of the farmers, one the other hand it is bringing contractual farming under the ambit of the Goods and Service Tax. The idea is to stop the big players finding their way to the shelves of the big mall while giving contracts to farmers to grow specific agricultural products.
Experts say that the GST would be applicable to contract farmers. A few quick service restaurants and burger chains, who are knowingly allocating contracts for potato farming, would come under the purview of GST.
The farmers, who have traditionally known to be in the profession of farming, are not required to register for GST under the new tax regime.
The taxation of the agricultural commodity trading and contractual farming seems to be a right step in the direction of widening tax base of the Government. Thus, GST to bring cheers to poor farmers, but won’t be that cheerful for agro-based traders or industrialists.