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Poultry industry is opposed to have their farms assessed for Panchayat taxes

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Poultry industry as opposed to having their farms assessed for Panchayat taxes

The poultry sector is opposed to the proposal in the draft guidelines of Karnataka Gram Swaraj and Panchayat Raj (Gram Panchayat’s Tax, Rates, and Fees) Rules, 2021, to define poultry farms as an agriculture-based manufacturing unit and assess them for taxes.

Poultry Farm owners argue that poultry farms do not qualify as ‘buildings used for agriculture-based manufacturing units,’ making them taxable under the rules. They argue that poultry farming is an agricultural activity, similar to sericulture, in which silkworms are cultivated to produce silk.

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A delegation from the Karnataka Poultry Farmers and Breeders’ Association (KPFBA) and the National Egg Co-ordination Committee (NECC) met with officials from the Departments of Rural Development and Panchayat Raj, as well as Animal Husbandry, earlier this week to submit their objections to the new guidelines, which will be published on December 29, 2021.

They argue that poultry farms cannot be defined as ‘buildings used for agriculture-based manufacturing units,’ making them taxable under the rules.

KPFBA president Sushanth Rai argued that poultry farms are not covered by the Karnataka Gram Swaraj and Panchayat Raj Act 1993, but rather by the Karnataka Land Reforms Act, which recognizes poultry farming as agriculture. According to Section 2 (1)(d) of the Act, ‘agriculture included aquaculture, horticulture, dairy farming, poultry farming, livestock breeding, and grazing.’

He also stated that the Karnataka Land Reforms Act does not require the conversion of agricultural land where poultry farms are established. ‘Poultry farming is agriculture in and of itself, and poultry farms are mostly on agricultural land,’ he says.

Mr. Rai claimed that unless the lands are converted under Section 95 of the Karnataka Land Revenue Act, poultry farms cannot be assessed for taxes by local bodies, let alone gramme panchayats, and that including poultry farms in the definition of the agriculture-based manufacturing unit is ‘not only illegal but also unsupportable.’

He asserted that poultry farming is an agricultural rather than a commercial activity. ‘Poultry farming is not a manufacturing process in which raw agricultural materials are used, processed, and a new product is created. It’s an agricultural activity, similar to sericulture, in which silkworms are cultivated to produce silk,’ he explained.

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The NECC agreed with the KPFBA that the draught rules were ‘discriminatory’ and would force many poultry farmers to close their operations in Karnataka, which already imports about 50 lakh eggs from other states every day. The NECC representative stated that no other state had passed such legislation.

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