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Pesticides and Agrochemical producers have sought a reduction in the GST

Pesticides and Agrochemical

In order to promote the use of crop protection chemicals by farmers in the country, pesticides and agrochemical producers have sought a reduction in the GST in the Budget.

In line with other agri-based inputs such as seeds and fertilisers, the Pesticide Manufacturers & Formulators Association of India (PMFAI) has proposed reducing GST on pesticides to 5 percent from the present 18 percent.

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PMFAI is an industry body comprising of over 200 domestic pesticide producers, formulators and traders on a small, medium and large scale.

Growing the disadvantage of duties to raise exports

In addition, the PMFAI also made a pitch to increase the duty disadvantage on pesticide exports to 13% from the current 2% mark. It also proposed an increase in the customs duty to protect domestic producers on imports of finished pesticide formulations or chemicals to a minimum of 30 per cent and on technical-grade goods to a minimum of 20 per cent.

PMFAI also proposed, in its representation to the Ministry of Fertilisers, that the Government expand the budget’s financial support and other development assistance to develop technologies for intermediate and technical grade pesticides indigenous to the Make in India programme.

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The reducing of the GST would help three-fourths of India’s total farmers, who are already out of the ambit, secure their crops without suffering any significant losses to the central treasury. In a quote, Pradip Dave, President, PMFAI, said that this will help the farmers reap crops with minimal loss and earn higher returns as well.

Since agriculture is the only sector that has shown 3.5-4 percent resistance and development in the last quarter, special emphasis and support is needed, PMFAI said.

CropLife India, which represents R&D-driven agro-chemical companies, believes that the GST must be reduced to 12% as it will help to minimise farmers’ costs of crop protection pesticides. CropLife said that the budget should provide chemical firms with a 200 percent deduction on R&D expenditures to encourage local innovation, Make In India and provide farmers with new technology. For units with a minimum fixed asset of ₹ 50 crore and incurring expenses of ₹ 10 crore, the government should consider this.

200% deduction on R&D

India’s regulatory processes must align with the international regulatory environment if India has to become a global supply center. Asitava Sen, CEO of CropLife India, said, ‘We request the Indian Government to implement a scientific, progressive and predictive regulatory system for the industry to achieve its full potential.’

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In addition, CropLife also recommended that the government should allow industry to rethink one state’s input credit to the taxable situation in another state, as the central tax is GST.