1. GST Council revises tax rates on fertilisers, exclusive tractor parts.

 

  1. Fertilizers falls under HSN code chapter 31 of GST commodity tariff schedule.

 

  1. With the new implemented GST , fertilizers, which are earlier exempt from tax, attracted a tax rate of 12% which is now reduced to 5%.

 

  1. Union Minister for Chemicals and Fertilizers and Parliamentary Affairs Ananthkumar said that the decision to cut GST rates on fertilisers was primarily taken in the interests of the farmers.

 

  1. The GST Council as on 30th June,2017 under HSN chapter 3102,3103,3104 and 3105, hours before launching the landmark tax reform, decided to lower the tax rate on fertilisers to 5 per cent from 12 per cent and on exclusive parts of tractors to 18% from 28% decided earlier, to ensure that their prices do not rise and farmers' interests are protected.

 

  1. Some felt that “12 per cent rate of GST (on fertilisers) may increase burden on farmers, so the consensus within the Council was to bring the rate down to 5 per cent," Union Finance Minister Arun Jaitley who chairs the GST Council announced after Friday's meeting at New Delhi's Vigyan Bhavan.

 

  1. A 12 per cent GST rate could have seen retail prices going up by Rs 30 to Rs 120 per bag (50kg) on urea, diammonium phosphate (DAP) and potash, in states like Punjab, Haryana, Andhra Pradesh, where there is zero tax on soil nutrients.

 

  1. "The move on fertiliser is surely positive for the industry and also farmers but the input tax credit issue needs to addressed earnestly or it will add on to our long list of unpaid bills," Satish Chander, chairman of theFertilizer Association of India, told Business Standard.

      9. The reduced GST rate will bring down burden on farmers by Rs 1,261 crore, Chemicals and Fertilisers Minister Ananth Kumar said.

         

  1. The industry had made several appeals to the fertilizer ministry to revise the GST rate to protect the interest of farmers. They had argued that such a high tax rate would see their production costs shoot up significantly affecting farmers adversely.

 

  1. “The GST regime, apart from integrating the entire fertilizer market into a single market, will also deter inter-state smuggling of fertilizers which may be currently happening due to differing levels of taxes and consequently MRPs in different adjoining States,” an official statement said.

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