Farmers, CICU upset over 12% GST on farm machinery

Manav Mander

Tribune News Service

Ludhiana, June 22

After craftsmen, it is farmers who are worried about the implementation of the Goods and Service Tax (GST).

The implementation of 12 per cent GST on the farm machinery is likely to increase the farmers’ burden.

On the one hand, the government was encouraging farmers to adopt new mechanisation and giving subsidy to buy machinery and on the other hand the machinery is set to become costlier and out of the reach of many farmers after the implementation of the GST.

Kamaljeet Singh, a marginal farmer from Jodhan village, said: “The manufacturers will pass on the burden of the increased rate to the buyer and thus the farmer will end up paying more. Government do gives subsidy on buying farm machinery, but it should have been kept out of the purview of the GST,” he said.

Avtar Singh, president of the Chamber of Industrial and Commercial Undertaking, said the farm machinery was earlier exempted from the VAT and Excise duty, but would now come under the purview of the GST at the rate of 12 per cent. “So the farm machinery is set to become costlier. For example, the agriculture implements such as rotavator or thrasher which were earlier priced at Rs 1 lakh will now cost Rs 1.12 lakh.

According to a study conducted by the Confederation of Indian Industry, food grain consumption will double by 2030. Each year, there will be an increase of 4 per cent in the consumption — from Rs 11 trillion to 22.5 trillion by 2030. This equates to the growth of per-capita consumption from Rs 9,360 to Rs 15,390. One of the prime factors to increase the production is farm mechanisation. Further, the adoption of farm machinery is very low in India compared to the USA and Europe. At present, tractors are being used in 21.30 per cent of the farmland.

To make available various agricultural implements and machines at cheaper rates, the assistance in the form of subsidy at 25 per cent to 50 per cent of the cost of equipment/machine with permissible ceiling limits is available to all category of farmers for the purchase of various agricultural equipment under various schemes of the Department of Agriculture and Cooperation such as the Macro Management of Agriculture, National Food Security Mission, Rashtriya Krishi Vikas Yojana, National Horticulture Mission, etc.

Upkar Singh, CICU general secretary, said: “We have requested the Finance Minister to keep the farm machinery out of the purview of the GST,” he said.