International Journal of Academic Research and Development

International Journal of Academic Research and Development


International Journal of Academic Research and Development
International Journal of Academic Research and Development
Vol. 3, Issue 4 (2018)

GST and Indian agriculture: An overview


Akram A Khan, Asim Hasan, Md. Anis Anwar

Agriculture plays a significant role in Indian economy. It employs the largest section of India’s workforce contributing around 16% in India’s GDP. The serious problem plaguing the Indian agriculture sector is related to farmers not getting fair prices for their produce. This sorrow is linked to the low prices of agricultural products. The proper implementation of the GST is expected to boost the sector. GST is essential to improve the transparency, reliability, and timeline of supply chain mechanism. A better supply chain mechanism would ensure a reduction in wastage and cost for the farmers/retailers. GST would also assist in reducing the cost of heavy machinery required for producing agricultural commodities. However, firstly on the input side a problem may arise in the sector as the prices of fertilizers may spike under the GST. Previously, fertilizers were at 6% (1% excise + 5% VAT). Under GST, the tax slab is at 12%. Pesticides have been placed in 18% slab. Previously, tractors were exempted, but under GST tractors are now taxed at 12%. However, the positive side to this is that manufacturers will be able to claim Input Tax Credit. The burden, however, will increase on consumers. Secondly, on the output side the higher tax rates are expected to discourage the development of food processing industry, especially for perishable fruits and vegetables. This may also affect the employment in food processing industry. The processed foods like fruit and vegetable juices under GST will be taxed at 12% up from 5%. So, apart from benefits there is some negativity also linked with GST in agriculture. Thus, various aspects related to impact of GST on Indian agriculture sector has been tried to figure out in the present study.
Download  |  Pages : 94-100
How to cite this article:
Akram A Khan, Asim Hasan, Md. Anis Anwar. GST and Indian agriculture: An overview. International Journal of Academic Research and Development, Volume 3, Issue 4, 2018, Pages 94-100
International Journal of Academic Research and Development International Journal of Academic Research and Development