Impact of GST on Agricultural Sector Or Farmers
In present time it is certain that agriculture is one of the main sources of income. With the past taxation system it is certain that agricultural sector had availed many benefits from indirect tax system in the form of exemptions. Most agricultural accessories were levied of reduced tax, but with the implementation of unified tax system (GST) it is certain that this sector and farmers may face few impacts.
Under the new GST regime it is certain that agriculture refers to all activities that are related to farming and rearing plant and animal products excluding raw materials, fiber, food and horse rearing.
Tax rates for farmers under GST
Cheaper GST TAX
- Under the GST it is certain that no additional tax has been imposed for farmers for purchase of organic compost and seeds.
- 5 percent GST tax is imposed on purchase of Head pump parts which is 7.5 percent less amount as compared to previous tax system.
- Reduced GST of 12 percent is imposed on tractor purchase which is 0.5 percent less as compare to earlier tax.
- On purchase of chemical fertilizers lowered GST rate of 5 percent has been imposed as compared to 12 percent earlier tax.
You can also know here “What is the Tax Exemption and Service Charges in Fasal Bima Yojana“.
Increased GST tax
- Around 18 percent GST has been implemented on purchase of tractor Rim and tire and other parts which is increased by 5.5 percent as compared to earlier taxation system.
- 12 percent tax has been imposed on purchase of Grader, Earth and Harvester parts which was earlier exempted from taxation.
- Around 8 percent GST has been added on insecticides which are 11.5 percent more as compared to earlier tax.
“You can read here Farmers to be educated Under Pradhan Mantri Fasal Bima Yojana .”
Benefits of GST on farmers
- As agriculturists are liable to pay tax so it is certain that they are no longer considered as non-taxable persons.
- Farmers will not be eligible to pay service tax under the GST regime. Apart from this most agricultural products are also exempted from taxation.
- Non processed agricultural products under the GST has been exempted by the government so far.
“You can read here Benefits of PM Fasal Bima Yojana”
Effects of GST on farmers
- With increased GST on certain food grains and agricultural products it is certain that for a farmer the cost of production would also increase.
- As the taxation system is unified so it is certain that farmers may no longer get the benefits of variations in prices within different states in the country.
- Purchase of other agricultural products including sprinklers and fertilizers is likely to be more expensive for farmers.