FICCI urges government to reduce GST on agrochemicals from current 18% to 5%

As crop protection solutions are crucial for proper management of crop health for higher productivity and income of farmers and sustained growth of the agriculture sector, FICCI today said that GST Council should consider the agrochemical industry request favourably seeking reduction of the tax rate on agrochemical inputs for the farm sector from current 18 per cent to 5 per cent at the maximum.

The 47th meeting of the GST Council, chaired by Union Finance Minister Ms Nirmala Sitharaman, will be held in Chandigarh on June 28 and 29.

Addressing the Press Conference on ‘Policy Landscape for a Flourishing Agrochemicals Industry’, organized by FICCI, Mr R G Agarwal, Chair, FICCI Committee on Crop Protection and Chairman, Dhanuka Group said that high Goods and Service Tax (GST) on crop protection chemicals especially hurts small and marginal farmers by increasing their input cost and prompting them to use these essential ingredients in sub-optimal quantities to the detriment of farm output and their own financial health.

“A GST of 18 per cent on agrochemical is highly unjustified since they act as insurance to not only crop health but also increase their quality, yield and income of farmers. This high rate of 18 per cent is not justified and it should be brought down to a maximum of 5 per cent at par with fertilizers,” he added.

In view of the climate changes and emerging threats of pest and disease there is urgent need to overhaul the regulatory system for introduction of new and innovative chemistries and technologies. There is also an urgent need to improve the enforcement mechanism, at several levels, to ensure the supply of high-quality agrochemicals to farmers on a sustainable basis, it was discussed.  

“The Government must undertake total reforms in the working of the CIB&RC and advise them to implement the decisions taken in the various RCs at the earliest in a transparent manner,” he added. Effective and timely implementation of regulatory decisions by the government will help the agrochemical sector to become more efficient in delivering solutions that benefit the agriculture sector in a sustainable manner.

Leave a Reply

Your email address will not be published.