UP MLA Urges GST Exemption on Agricultural Equipment, Citing 12-18% Tax as a Burden on Farmers

Lucknow— In the Uttar Pradesh Assembly on Wednesday, Rajendra Prasad Chaudhary, an MLA from Rudhauli in Basti district, raised the issue of lifting GST from agricultural equipment, pesticides, and other agricultural inputs. He argued that the government's imposition of 12 to 18 percent GST on agricultural equipment, with 28 percent GST on some items, is causing losses for farmers.

Chaudhary emphasized that exempting all agricultural equipment from GST would reduce costs and increase farmers' income. He particularly highlighted the GST collection on equipment aimed at preventing pollution, such as super seeders, paddy straw choppers, and mulchers.

In a conversation with The Mooknayak, Chaudhary expressed concern about the environmental impact, stating that GST is being imposed on machines designed to address pollution, like those that destroy stubble. He argued that making these machines tax-free would encourage their use, contributing to environmental protection.

"We are concerned about the environment, and so is the government and the court. Many agricultural machines that help eliminate stubble have also been taxed. What I meant was, if they were tax-free, farmers could easily access and use them, thereby protecting us from environmental pollution," Rajendra Prasad Chaudhary explained to The Mooknayak.

Responding to Chaudhary's concerns, Finance Minister Suresh Khanna stated in the Assembly that fertilizers and pesticides have a 5 percent GST, while hand and animal-drawn agricultural equipment like hoes and shovels are exempt. He explained that decisions regarding GST on other equipment are made by the GST Council after careful consideration, and removing GST could make farmers' equipment more expensive.

Rajendra Prasad further tells The Mooknayak, "Khurpi, Hansuwa, Shovel are items worth a hundred rupees. No tax is imposed on them. However, when you add up the prices of agricultural equipment, ranging from tractors to rotavators, mulchers, cultivators, combines, and plows, the farmer ends up paying lakhs of rupees in taxes. This hefty sum is a significant burden for the farmers." He added, "To mislead the farmers, it is claimed that we are providing Rs 2000 per quarter (under Kisan Samman Nidhi) to them. Conversely, the government collects lakhs of rupees from farmers in the form of taxes on agricultural equipment. Your Rs 6,000 assistance is negligible compared to the substantial tax burden."

The significance of the issue highlighted by the MLA could be understood by the fact that the mulcher plays a crucial role in cutting and breaking stubble, eliminating the need for stubble burning. By using this device, environmental and soil health damage caused by field fires can be prevented. However, the imposition of GST by the state and center on similar implements such as Reversible Plough, Straw Baler, and Happy Seeder, each costing lakhs, imposes a substantial burden on farmers. This tax significantly hinders the purchase and utilization of agricultural equipment designed to protect the environment from pollution.

The Mooknayak spoke to Dilip Tiwari, the proprietor of Kisan Harvester, a prominent dealer of combines and other agricultural equipment, regarding the GST on agricultural equipment. Tiwari explained that the company providing these agricultural tools includes a 12 percent GST, compelling them to sell the equipment to customers with the same tax. The cost of equipment for stubble management is approximately Rs 3 to 4 lakh, and farmers have to bear an additional GST burden ranging from Rs 35 to 40 thousand.

Addressing the issue of GST on agricultural equipment, UP farmer Rajesh Tripathi conveyed to The Mooknayak, "GST should not only be removed on agricultural equipment, but similar to the government's subsidies on other items, support should also be extended to these tools." Tripathi emphasized that the government, which manages various aspects, should take responsibility for stubble removal from farmers' fields. He argued that if the government addresses stubble management directly, there would be no need for expensive agricultural equipment. Tripathi also raised concerns about the government's financial support to large factories without interest, juxtaposed with the plight of farmers resorting to suicide.

It's worth noting that on November 21, the Supreme Court, as part of efforts to discourage stubble burning (carrot and stick mechanism) suggested excluding minimum support price (MSP) for stubble-burning farmers from the scope of infrastructure support.

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