Impact Of GST On Agriculture

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1) Fertiliser- Currently it attracts a VAT 0% to 8%, but under GST the rate is 12%, so the price of fertiliser will go up.

2) Pesticides- Currently it attracts an excise duty of 12% and VAT of 4-5% in some states. Under GST the rate is 18%

3) Tractor- Under GST several Components and Accessories of tractor are in the bracket of 28% where as tractors are in the bracket of 12%

4) Raw Agri Commodities- Like Rice, Wheat, Milk, Fresh Fruits, Vegitables, are under Zero Rated. This will bring major relief in Punjab where presently a VAT of 12% is imposed on wheat and Rice.

5) Fruit and Vegitables Juices- Currently taxed at 5% under VAT. Under GST the rate is 12%

6) *Fruit Jams, Jellies, Marmalades, Purees- Currently taxed at 5% under VAT. Under GST the rate is 18%

7) Dairy farming, poultry farming, and stock breeding are kept out of the definition of agriculture. Therefore these will be taxable under the GST.

8) Definition of Agriculturist- agriculturist” means an individual or a Hindu Undivided Family who undertakes cultivation of land—
(a) by own labour, or
(b) by the labour of family, or
(c) by servants on wages payable in cash or kind or by hired labour under personal supervision or the personal supervision of any member of the family;

Note- The scope of the definition is restricted to an Individual or a Hindu Undivided Family. *Any other “person”* as defined in section 2(84), carrying on the activity of agriculture *will not be considered as an Agriculturist* and hence will not be exempted from registration provisions as Provided in section 23 (1)(b), of the Act.

Regards
ACA SOURAV BAGARIA