The dairy industry has requested a zero tax on nutritional items such as Butter, Ghee (butter oil) and Paneer (cottage cheese) from the existing 12 % Goods and Services Tax (GST) to supplement the government’s efforts to ensure the nation’s nutritional stability (GST).
The Indian Dairy Association (IDA) wrote to Ministry of Finance addressing to FM Nirmala Sitharaman urging zero tax on packed dairy products that are nutritionally rich. We proposed that the Minister of Finance reduce the GST on Butter, Ghee and Paneer from 12% to 0%. The packed paneer currently attracts 12% of GST whereas the unpackaged One is sold without GST. The government spends a lot on the safety of nutrition. A rich source of nutrition is ghee and paneer,’ said GS Rajorhia, the President of IDA.
Stocks in Skimmed Milk Powder (SMP)
The dairy body has also raised the problem of providing a fair playing field for the liquidation of skimmed milk powder (SMP) stocks by Indian dairy units, which had accumulated during the lockdown period.
‘The nation actually has SMP stock of around 2 lakh tonnes. We require govt’s support to liquidate these stock on the global market, without any export duty imposed upon this. Let everyone be given the chance to find their business. And we don’t want it forever, but for a year before we can clear the stock,’ Rajorhia said, adding that in order to make milk farming competitive and attractive to farmers, it is important to reduce input costs with a reductions in GST on inputs apart from feed.
Dairy producers are now pursuing treatment on a par with agricultural farmers for landless animal breeders. The Managing Director of Amul Marketer, Gujarat Cooperative Milk Marketing Federation Limited (GCMMF), Mr. RS Sodhi, said, that ‘Out of the total budget of around 1.8 lakh crore with in the agriculture and fertiliser industry, the livestock sector receives approximately 3,300 crore, which is not even 2%.’
In this way, the care of cattle, dairy, poultry, fisheries and agricultural crops must be equal. Whatever advantages are available to land-owning farmers, landless livestock keepers must also be available. When it comes to resource allocation, dairy farmers should not receive step-motherly justice, Mr. Sodhi said.
The gross value added by livestock to agriculture and the allied sector in percentage terms rose from 21.8 % in 2011-12 to 28.4 %in 2018, while GVA fell from 18.5 % to 17.2 % in the same period in percentage terms for agriculture and the allied sector to the country’s GDP.
Not merely allied operation anymore
Sodhi suggested that the problem lies in the traditional method of stressing the allocation of resources for crop production. ‘ The pattern of resource allocation for crop production continued right after the Green revolution.’
‘For landless and marginal farmers, livestock or animal husbandry is no longer just an allied activity. It is a major source of income. Of about 100 million people linked to livestock, about 80 % are rural Indian families who are landless and marginal. But most of the agricultural resources go to farmers who own land. This has to be corrected to whichever extent possible, Sodhi said.
Liability to income-tax
In addition to, among other items, the resource requirements for infrastructure growth, yield enhancement and breeding development, there is also a long-overdue question of income tax liability for dairy farmers, while no income tax is imposed on land-owner farmers.
There is a great deal of distress today in the rural and agricultural sectors, but if resources are made available, the livestock sector would boost rural India’s livelihoods. This is because there isn’t a problem with ads. The demand is rising constantly,’ said Sodhi.