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LATEST NEWS UPDATES | GST from 1 July: Will farmers have to pay higher MRP on old fertiliser stocks worth Rs 9,500 cr?

GST from 1 July: Will farmers have to pay higher MRP on old fertiliser stocks worth Rs 9,500 cr?

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published Published on Jun 29, 2017   modified Modified on Jun 29, 2017
-FirstPost.com

The rollout of the goods and services tax (GST) starting 1 July has created a panic situation for the fertiliser industry mirroring a similar state of affairs a few weeks earlier with the consumer staple and home appliance manufacturers.

An estimated 65 lakh tonne (lt) of bagged fertiliser material worth around Rs 9,500 crore already has the existing maximum retail price (MRP) printed on it. With the rise in GST rates, will the manufacturers be able to charge farmers the new rates on the old MRP is a question that is perplexing the industry.

Manufacturers in the fertiliser industry are staring at a possible loss of tax on goods to be sold after 1 July. To start with farmers currently pay tax on fertiliser purchases varying between 1.03 percent and 7.03 percent across states. Under the GST regime, farmers will have to pay a higher tax of 12 percent on fertilisers.

"There is no provision at present to pass on the additional tax incidence by charging a higher MRP on the already bagged stocks lying in the godowns of manufacturers and importers, or with wholesalers and retailers. And, farmers are obviously not going to pay anything more than the MRPs marked on the bags," The Indian Expressreport said quoting industry sources.

Fertiliser sales pick up sharply in July, August and September owing to kharif planting, with sales registering 115-120 lakh tonnes.

With the new tax rates coming through, farmers in the states of Punjab, Haryana and Tamil Nadu will be charged Rs 31 more for every urea bag, while this would be about Rs 17 in most other states.

Please click here to read more.

FirstPost.com, 27 June, 2017, http://www.firstpost.com/business/gst-from-1-july-will-farmers-have-to-pay-higher-mrp-on-old-fertiliser-stocks-worth-rs-9500-cr-3749973.html


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