Crop ProtectionAgriculture Industry

Union Budget 2023 must consider reduction in GST rates on Agrochemicals: R G Agarwal, Chairman of Dhanuka Group

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30 January 2023, New Delhi: Agriculture plays a vital role in the Indian economy. Over 70 percent of rural households depend on agriculture. It contributes about 17% to the total GDP and employs around 58% of the population. Indian agriculture has registered impressive growth over the last few decades. 

Mr. R G Agarwal, Chairman of Dhanuka Group

Agriculture is a State subject, the State Government is primarily responsible for the growth and development of the agriculture sector and developing perspective plans for their respective States, and ensuring effective implementation of the schemes. However, the Government of India supplements the efforts of the State Governments through various schemes.  

GST on Insecticide and Pesticide

Insecticides and pesticides are subjected to 18% GST (Goods & Service Tax) whereas other key agriculture inputs like seeds, fertilizers, drip irrigation equipment, and post-harvest equipment including tractors and harvesting machinery are in the range of 0% or 12% GST. So, the disparity among the agriculture inputs leads to a substantial increase in farmers’ costs that ultimately has an impact on farmers’ income.

Mr. R G Agarwal, Chairman of Dhanuka Group told Krishak Jagat, “In the upcoming Budget, we expect a reduction in GST rate on agriculture inputs like insecticide and pesticides. It will help the farmers of our country and the consumers. Taxes on essential items will lead to an increase in the cost of production and the produce.”

“If we see the complete cycle of taxation on farming of crops till its consumption, we find most of items or transactions are subjected to 12% or less than 12% GST but few items are subjected to 18% and one of them is agrochemicals which include pesticide and insecticide. The reduction of GST will help the farmer and the consumer as the cost of inputs is added to the cost of the final product,” mentioned Mr. Agarwal.  

Reduction in GST Rate on Unmanned Aircraft (Drone)

The product unmanned aircraft (Drone) falls in 8806 HSN and presently 18% GST is levied on it. India has witnessed a 34.4% growth in the number of drone-based startups from the August 2021 to February 2022 period which was mainly because of the PLI scheme.

Mr. Agarwal said, “The drone will not only help in the fast transportation of goods but also help the environment from pollution caused by vehicles. By using drones in agriculture, the farmers will reduce their input costs because of precision and low volume of agrochemical spray. Even the distributors of agriculture inputs can use it to transport essential items to farmers. Reduction in GST Rate on Drone will help farmers, distributors of agriculture inputs, the transportation industry, and govt itself in achieving a 5 trillion USD economy.”

Also Read: Millets & Organics -2023: Three-day International Trade Fair starts at Thripuravasini, Bengaluru

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