As the GST is being introduced with the unbiased objective of having a unified tax structure for goods and services, this is likely to facilitate and strengthen the Scheme on National Agricultural Market (NAM) aimed at an integrated system of market of agriculture produce at the national level, allowing free flow of agricultural commodities across states. Now check more details “Impact of GST on Agriculture Sector, GST Rates on Agriculture” from below… Must – GST Rate in India, GST Rates in India 2017 (Item Wise GST List in PDF)
Impact of GST on Agriculture Sector
How Agriculture is Placed under GST:-
As per the Model GST law “agriculture” with all its grammatical variations and cognate expressions, includes floriculture, horticulture, sericulture, the raising of crops, grass or garden produce and also grazing, but does not include dairy farming, poultry farming, stock breeding, the mere cutting of wood or grass, gathering of fruit, raising of man-made forest or rearing of seedlings or plants. This definition of agriculture under the Model GST Law is similar to the definition under the Maharashtra Value Added Tax Act (i.e. MVAT Act). However, under the Service Tax law, agriculture has been defined as ‘”agriculture” means the cultivation of plants and rearing of all life-forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products’. The new definitions of agriculture and agriculturist are provided by GST in section 2(7) and 2(8) respectively.
GST Rates on Agriculture Sector
Merits of GST in Agricultural Sector
Demerits of GST in Agricultural Sector
GST is expected to reduce incidence of suppressed sales since billing and payment of tax would be necessary for availing set-off of taxes at each stage. The same standard would apply to transactions between traders in agricultural commodities where there is significant amount of suppressed sale The present system often, makes it difficult to implement tax support provided by the centre for an agro-commodity due to diverse policies adopted by the different states. The implementation of GST is predicted to bring uniformity across states and centre which would make tax support policy of a particular commodity effective. The ease of availing tax credit under GST regime is expected to lift inter-state trade leading to achieving the objectives of National Agricultural Market
Conclusion:
An increase in the cost of few agricultural products is anticipated due to the rise in inflation index for lesser period. Though, implementation of GST is going to benefit a lot, the farmers/distributors in the long run as there will a single unified national agriculture market. GST would certify that farmers in India, who contribute the most to GDP, will be able to sell their produce for the best available price. Written By: Amit Khiyani (CA, LCS, IFRS, BCom) Contact: khiyaniamit88@gmail.com Recommended Articles
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