GST COUN­CIL CUTS TAX RATE ON FER­TILISER TO 5 PER CENT

Business Sphere - - IN THE NEWS -

Hours be­fore the Goods and Ser­vices Tax was rolled out on mid­night of June 30, the allpow­er­ful GST Coun­cil re­duced the tax rate on fer­tiliser to 5 per cent from pre­vi­ously de­cided 12 per cent. Fi­nance Min­is­ter Arun Jait­ley, who heads the GST Coun­cil com­pris­ing rep­re­sen­ta­tives of states, said the de­ci­sion to re­duce the tax rate on fer­tiliser was taken be­cause of ap­pre­hen­sions that price of the crop nu­tri­ent may go up. The GST Coun­cil, in an­other move to give re­lief to farm­ers, also cut tax rate on ex­clu­sive parts of trac­tors from 28 per cent to 18 per cent. "Some felt it (12 per cent GST rate) may be a bur­den on con­sumer. There was a con­sen­sus (in the GST Coun­cil) to bring rate to 5 per cent," he told re­porters af­ter the 18th meet­ing of the Coun­cil. The Coun­cil meet­ing was called more as a thanks giv­ing meet with no for­mal agenda. But it did take up the cause of farm­ers at the meet­ing. Since its first meet­ing on Septem­ber 23, 2016, the Coun­cil has met 18 times and de­cided on range of is­sues - from drafts of sup­port­ing leg­is­la­tions to GST rules, rates of taxes and fit­ting over 1200 goods and ser­vices in the four-tire struc­ture of 5 per cent, 12 per cent, 18 per cent and 28 per cent. Jait­ley said the Coun­cil meet­ing also ap­proved ad­di­tional set of rules. He did not elab­o­rate on the is­sue. The re­duced GST rate will bring down bur­den on farm­ers by Rs 1,261 crore, Chem­i­cals and Fer­tilis­ers Min­is­ter Ananth Ku­mar said. "Prices of urea, DAP, MoP, and mixed fer­tilis­ers will come down marginally with re­duc­tion in GST rate from 12 per cent to 5 per cent," he said. Ku­mar claimed that the re­duced GST rate on fer­tilis­ers will help in bring­ing pros­per­ity in ru­ral ar­eas. "I feel the GST, which is go­ing to be un­folded is fo­cused on goan, garib and kisan. A new his­tory been cre­ated again with GST roll­out," he added. Post GST, the av­er­age weighted MRP will de­crease to Rs 5,909 per tonne (or Rs 295.47/50 kg bag) as com­pared to the ex­ist­ing all-In­dia weighted av­er­age of Rs 5,923 per tonne (or Rs 296.18 per 50 kg bag. Un­der the GST regime, there will be a uni­form MRP of Rs 295.47 per 50 kg bag across the coun­try ex­cept few states where ad­di­tional VAT is charged on nat­u­ral gas. How­ever, even in these states MRP will re­duce by Rs 3 per 50 kg bag. Sim­i­larly, the MRP of P&K fer­tilis­ers, for which the prices are not ad­min­is­tered, are also ex­pected to come down on an av­er­age ba­sis as the in­ci­dence of tax will be lower than the ex­ist­ing tax. The gov­ern­ment has asked the in­dus­try to pass on the ben­e­fits to farm­ers. The GST Coun­cil to­day re­duced the GST rate on fer­tilis­ers to 5 per cent from 12 per cent be­cause of ap­pre­hen­sions of rate of crop nu­tri­ent go­ing up. At present, taxes on fer­tilis­ers are in the range of 0-6 per cent in dif­fer­ent states. Re­tail price of urea, which is fixed by the gov­ern­ment, is at Rs 5,360 per tonne now. The prices of DAP and potash, fixed by pri­vate com­pa­nies, are at Rs 22,000 and Rs 11,000 per tonne, re­spec­tively. The GST, which uni­fies more than a dozen cen­tral and state levies like ex­cise duty, ser­vice tax and VAT, was im­ple­mented from mid­night of June 30. The GST Coun­cil will review the im­ple­men­ta­tion of the Goods and Ser­vices Tax as also levies on some of the items on Au­gust 5. "The review meet­ing of the GST Coun­cil would be on the first Satur­day of Au­gust," Cen­tral Board of Ex­cise and Cus­toms Chair­per­son Vanaja N Sarna told PTI. The meet­ing will take stock of the im­ple­men­ta­tion of the big­gest tax re­form since in­de­pen­dence and also review tax rate with re­gard to any com­mod­ity high­lighted by mem­bers in the meet­ing, she said. She ruled out any glitches in the roll­out and said var­i­ous steps have been taken to spread aware­ness about the new tax­a­tion sys­tem. "It is good and sim­ple tax and it is good from all as­pects. So, many taxes, 17 taxes go­ing into one is def­i­nitely go­ing to get sim­ple," she said.

Fi­nance Min­is­ter Arun Jait­ley

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