Fertilisers, tractor parts rates revised at 11th hour

New Delhi: Bearing the brunt of widespread farmers’ protests in many states, the BJP government at the Centre tried to mitigate the likely fallout of the implementation of the GST on the agriculture sector by reducing the tax rate on fertilisers to five per cent from the earlier 12 per cent.

The decision to reduce the tax rate on fertilisers was taken at the all powerful GST Council meeting, chaired by finance minister Arun Jaitley, on Friday, hours before the roll out of the biggest tax reform.  

“Some felt it (12 per cent GST rate) may be a burden on the consumer. There was a consensus (in the GST Council) to bring rate to 5 per cent,” Mr Jaitely told reporters after the 18th meeting of the council. He said that a decision to reduce the tax rate on fertiliser was taken because of apprehensions that price of the crop nutrient may go up. At present, taxes on fertilisers are in the range of 0-6 per cent across states.

The GST Council, in another move to give relief to farmers, also cut tax rate on exclusive parts of tractors from 28% to 18%. The tractor manufacturers have been pitching for lower tax rate for components. They wanted tractor industry to be kept at par with construction equipment.

Farmers in Maharashtra, Madhya Pradesh and Punjab are protesting against low minimum support prices which is making agriculture an almost unsustainable enterprise. Political parties have jumped into the protest bandwagon, chief amongst them the Congress which has been asking the BJP to implement its pre-election promise of giving farmers MSP plus the 50 percent cost of production.

Six farmers were killed in Mandsaur in MP during farmers protest following which Congress vice-president Rahul Gandhi had visited the are charging up the political atmosphere.