Government should propose to GST Council to cut tax rates on fertilisers from current 5 per cent: Parliamentary panel

economictimes.indiatimes.com:

Parliamentary panel has recommended that the government should propose to the GST Council to reduce tax rates on fertilisers from the current 5 per cent. In its report laid in Parliament on Wednesday, Standing Committee on Chemicals and Fertilizers said the committee have been informed that fertilisers were placed under the 12 per cent GST bracket. However, on demand of various states, GST on fertilisers was reduced to 5 per cent.

«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 of our country," it added.

The panel noted that fertilisers are levied GST at 5 per cent and its raw materials, like sulphuric acid and ammonia, are levied a higher GST at 18 per cent on the recommendations of the GST council. «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.