The Parliamentary Standing Committee on Chemicals and Fertilizers in a report, submitted Wednesday, has asked that the government to propose to the GST Council a further reduction on tax on fertilisers from the current five per cent. The government has already reduced the GST on fertilisers from 12 per cent on demand from various States.

“The issue to further reduce GST on fertilisers was placed before the GST council in its 45th and 47th meetings held in September 2021 and June 2022, respectively. The GST council, however, did not recommend any change in the rates of fertilisers or other organic farm inputs. The committee strongly recommend that the issue to further reduce GST on fertilisers may be placed before the GST Council at the earliest in the best interest of the farmers,” the panel said.

It said that though fertilisers are levied GST at five per cent, som of its raw materials like sulphuric acid and ammonia are levied a higher GST at 18 per cent.

“The Committee failed to understand this anomaly. The Department has clarified that the raw material of fertilisers like Sulphur has multiple uses and is also used in the production of detergents, paints, dyes etc. Similarly, ammonia too has multiple uses and is also used as refrigerator gas, manufacturing of plastics, explosives, textiles etc,” according to the report.

Still, the panel suggested considering lower GST for these raw materials when used for production of fertilisers.

The panel also asked the Department of Fertilizers to take all remedial measures to contain the deficit of various types of fertilisers in the country, especially urea, and make it more self-reliant.

The committee urged the government to review the present Nutrient based subsidy policy for phosphatic and potash (P&K) fertilisers in order to remove the disincentives for farmers to use other fertilisers rather than urea.

Related Topics
comment COMMENT NOW