Hours after PM Narendra Modi and President Pranab Mukherjee launched the Goods and Services Tax (GST) at the stoke of midnight, Ananth Kumar, who is the Union Minister for Chemicals & Fertilizers and Parliamentary Affairs addressed the media explaining the outcome of the move in regards to the Fertiliser sector. Ananth Kumar said that the government decided to reduce the GST rate of fertiliser from existing 12 per cent to 5 and has also taken up with the industry to pass the benefits to the farmers.
“The farmers of the country would benefit to the tune of Rs. 1261 crores under GST regime. Under the new GST rates announced by the Council, average weighted MRP will decrease to Rs. 5909/ Ton (or Rs. 295.47/ 50kg bag) as compared to the existing All India weighted Average of Rs 5923/ Ton (or Rs. 296.18/50 kg bag),” said Ananth Kumar.
The Chemicals and Fertilisers minister also informed that there will be a uniform maximum retail price (MRP) of Rs 295.47 per 50 kg bag across the country excluding those states where additional VAT is charged on the natural gas as it has not been included under the ambit of the GST. However, even in these states the MRP will be reduced by Rs 3 per 50 kg bag.
In the same way, the MRP of P&K fertilisers, for which the prices are not administered, are also expected to come down on an average basis as the incidence of tax will be lower than the existing tax on an average, the Minister added.
The GST implementation will not just integrate the entire fertiliser market into one single tax window, but will also restrict the inter-state smuggling of fertilisers which currently happens under the garb of different levels of taxes and the consequent MRPs in different states. The GST would realise the Prime Minister of India, PM Modi’s vision of ‘One Nation, One Market, One Tax’, Ananthkumar added further.