Campco favours tech-enabled monitoring of bulk agri produce movement

The Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd has urged the Central government to monitor the bulk movement of agricultural produce through global positioning system (GPS) to curb tax evasion in some such products.

Kishore Kumar Kodgi, President of Campco, told BusinessLine that the cooperative has already brought this issue to the notice of Union ministers such as Nirmala Sitharaman, Amit Shah, Prahlad Joshi and Shobha Karandlaje.

He said the unscrupulous trader network lures the agriculturists in commodities such as arecanut to sell their produce to the unorganised sector, without creating documents for such transactions.

The gullible agriculturists fall prey to the small rate advantage being passed on by the such traders because of tax evasion by them. Following this, such farmers do not bring their produce to the organised network such as cooperatives for sale.

In this process, there is loss of revenue to the State through tax evasion by the connected operators other than the agriculturists.

“In the light of above, we suggest that all bulk movement of products be covered and monitored by GPS, along with e-way bill, by the GST offices concerned. By mandating that all bulk consignments of agricultural produces such as arecanut are electronically monitored, it is possible to ensure that all such transactions enter the taxation chain and get taxed, thereby creating revenue for the States,” he said.

Seeks 2% GST

Stating that the agricultural produces are taxed under GST at different rates, he said Campco has suggested to the Centre that all agricultural commodities that are presently taxed at 5 per cent slab may be brought under the 2 per cent GST slab.

This will encourage farmers to sell their produces to cooperatives and marketing committee platforms, and would ensure in discouraging tax evaders.

Campco has also suggested to the Centre to subsume APMC fees into GST in order to  bring agricultural produces into the organised sector and encourage agriculturists to sell their produce to cooperatives and marketing committee platforms.

Stating that Uttar Pradesh is imposing mandi tax of 1.5 per cent for agricultural commodities dealt through mandis, he urged the need to have a re-look at such taxes.

Copper sulphate

Requesting the government to revise GST on copper sulphate, Kodgi said copper sulphate is mainly used in controlling fungal diseases in crops such as coffee, arecanut, rubber, cardamom, pepper and ginger and also as a plant nutrient.

Stating that copper sulphate attracts a GST of 18 per cent now, he said all types of fertilisers coming under the GST levy is at a reduced rate of 5 per cent only. But copper sulphate, which is used as fungicide is charged at 18 per cent, and as micro nutrient is charged at 12 per cent.

Referring to an order issued by the Union Ministry of Agriculture and Farmers Welfare in 2017, he said the order has classified all micro nutrients as fertilisers which attract GST rate of 5 per cent. When this is the case, different tax structures for copper sulphate as fertilizer and as micro nutrients lead to confusion.

He said copper sulphate is being used by small farmers as an agriculture fungicide. Hence fixing GST rate at 5 per cent on all copper sulphate used in agriculture would help farmers to a great extent.

Kodgi said the Campco has also requested the above ministers to redesign the process of assessing credit requirement and setting terms of repayment to farmers. At present, the process of assessing credit limits are by and large unscientific and committed to banking principles of bygone era.

“In the light of above, we suggest utilisation of technology to map agricultural needs of farmers, assess credit needs based on past performances and yields of their holdings, monitor harvest yields to ensure prompt repayment of loans, and develop information technology-based systems to reward prompt repayment through better and lower interest rates,” he said.

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