Farmers Call for GST Waiver on Agri Inputs Ahead of Budget 2024
In a recent pre-budget meeting with Finance Minister Nirmala Sitharaman, Indian farmers strongly advocated for the scrapping of GST on agricultural inputs. This demand stems from the increasing financial burden due to taxes on essentials like seeds, manure, and pesticides.
Why Farmers Want GST Relief
The farming community argues that GST on agri inputs significantly increases cultivation costs. For a sector employing nearly half of India’s population, high input costs directly impact productivity and profits. Farmers have requested the government to:
- Waive GST on seeds, fertilisers, and pesticides.
- Increase the PM-KISAN cash benefit to ₹10,000–₹12,000 annually due to inflation.
- Widen the MSP (Minimum Support Price) calculation formula to the C2 method (including all costs and family labour), replacing the current A2 + FL method.
Case Law: Impact of GST on Agriculture
The demand to scrap GST is not new. Court cases like R. Srinivasan vs. State of Tamil Nadu (2022) highlight how GST burdens small-scale farmers. The judiciary has acknowledged the need to balance revenue generation with agricultural welfare.
Government’s Response: Assurance but No Commitment
During the meeting, Sitharaman assured farmers that their concerns would be considered. The government emphasised its commitment to farmer welfare but did not confirm immediate GST relief.
Economic Analysis: The Need for Tax Relief
- Rising Input Costs: GST rates of 5%–18% on agri inputs increase operational costs.
- Inflation Impact: Prices for seeds and fertilisers have surged, reducing net income.
- Comparative Burden: Countries like the USA and Brazil provide subsidies and tax exemptions to farmers, boosting competitiveness.
Will Budget 2024 Deliver Relief?
Farmers are hopeful that Budget 2024 will address their concerns by:
- Scrapping GST on agricultural inputs.
- Increasing direct cash benefits under PM-KISAN.
- Implementing MSP reforms for fair compensation.
Conclusion
The scrapping of GST on agri inputs could reduce farming costs and support millions of livelihoods. As Budget 2024 nears, farmers await policies that truly sow the seeds of prosperity.