Farm sector stakeholders want exemption of GST on Agri inputs & tax breaks
Some of the suggestions that the stakeholders made to Finance Minister Nirmala Sitharaman when she was making the Budget for 2023–24 were to give tax breaks to people in the agriculture value chain, get rid of the Goods and Services Tax (GST) on agri inputs, increase the PM-Kisan incentive, and make sure that the minimum import prices of agri commodities are the same as the farm-gate prices.
‘Since the start of the GST, we have been arguing that lease rentals of godowns should not be taxed. Since we add value to the whole agri supply chain, any exemption would be a much-needed relief,’ said Sandeep Sabharwal, CEO of Sohan Lal Commodity Management (SLCM).
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He also said that the collateral warehousing business is a part of the whole agriculture value chain and focuses on logistics and warehousing after the harvest.
‘We act as middlemen and make sure the food lasts and stays good while it’s being stored for later use. This gives farmers and farm traders access to the financial system,’ he said. When services are provided in a rented godown or warehouse, the rent should not be subject to GST.
Sabharwal also asked for tax breaks for people in the agriculture value chain who use technology in mechanised systems to improve business operations. ‘The business world hopes that tax breaks like these will be in the next budget to encourage investment in new technologies like IoT, AI and ML, and Blockchain,’ he said.
Assocham, an industry group, said that private investment in agriculture and related activities can give the government spending the boost it needs and can help the rural economy grow. It suggested that GST should not be charged on services that are used to make agricultural products.
Some of the services were security services for storing agricultural products, lab testing services to check the quality of agricultural products, and fumigation services.
A farmers’ group called Bharatiya Kisan Sangh has asked for ‘profitable prices’ for crops, the end of GST on all agricultural inputs, and for the PM-kisan incentive of ₹6,000/year to be tied to inflation and raised to keep up with it.