GST on fertilizers add to farmers’ woes

By TheHindu on 06 Jul 2017 | read

The across-the-board 5% Goods and Services Tax (GST) imposed on fertilizers has come as a rude shock to farmers already reeling under severe drought in the State.

With fertilizers being exempt from tax in Tamil Nadu all these years, farmers contend that they could do without the increase in their price at this point of time. The prices of all commonly used fertilizers have gone up, depending on the nutrients used by different companies.

Even though the Centre reduced the GST on fertilizers to 5% from the originally proposed 12%, it still accounted for a substantial increase.

According to the revised prices notified by the Agriculture Department, the price of neem-coated urea has gone up by ₹11 for a 50-kg bag. Di-ammonium Phosphate (DAP), another widely used fertilizer, of various manufacturers has gone up by ₹40 to ₹75.50 a bag of 50 kg. Prices of complex fertilizers of various companies have also increased from ₹14 to ₹57 a bag (50 kg).

The Agriculture Department has instructed all retailers to display the revised rates prominently in shops and adhere to the same, failing which severe action will be initiated.

A representative of a prominent company said the fertilizers were exempt from any tax in Tamil Nadu till the introduction of GST though some states have been taxing them at 4% or above. The uniform tax rate will help prevent diversion or transport of fertiliser from one state to other.

However, criticising the move to bring fertilizers under the GST net, Puliyur A. Nagarajan, president of the farmers wing of the Tamil Maanila Congress, said farmers already facing a crisis due to drought and their inability to repay crop loans will be adversely affected by the additional burden.

“Even though the increase looks marginal, it will be a substantial sum when farmers have to buy four or five bags. For instance, a farmers will apply about 50 to 75 kg of DAP for an acre of paddy. For banana, they would use a minimum of 250 kg an acre,” he said.

Urea, DAP and complex fertilizers were widely used by farmers, he said and demanded that the Centre exempt them from GST, he added.

Some of the farmers’ representatives also feel that if farmers have to reduce the quantum of fertilizers, it would lead to drop in productivity.

R.Raja Chidambaram, Secretary, Tamizhaga Vivasayigal Sangam, regretted that the GST on fertilizers had come at a time when the purchasing power of farmers was at its lowest in the State owing to drought. Some retail dealers had stopped sales for the past few days due to the confusion over billing. “The Centre and State government should ensure that fertilizers were available at the earlier issue price and the same should be printed prominently on the fertilizer bags,” he said.Image title