GST on Agricultural Products - Agriinsights
Table of Contents
What is GST?
GST stands for "Goods and Service Tax." It is an indirect tax on taxable goods or services that was introduced in 2016 by the 101st Constitution Amendment Act.- GST is recommended by the Vijay Kelkar Committee.
- The GST was implemented on July 1st, 2017.
- Telangana was the first state to approve the GST bill.
- The GST's governing body is the GST Council.
- GST Council Headquarters: New Delhi
- Chairman of the GST Council, Union Finance Minister
- The phrase "One Nation, One Tax" was used to promote it.
- It is one of the biggest indirect tax reforms in the country.
- With the introduction of the GST, several central and state indirect taxes were combined into one tax.
- GST collection is the largest source of tax revenue for the Indian economy.
- In 1954, the GST was first implemented in France.
Types of Goods and Service Tax (GST)
- CGST (Centre GST): Collect by Central Govt. - include excise duty, service tax, etc.
- SGST (State GST): Collect by State Govt. - include VAT, luxury tax, etc.
- IGST (Integrated GST): Collected by Central Govt. - to cover inter-state trade.
Standard GST Rates
India's GST rates are split into four categories: 5%, 12%, 18%, and 28%.
GST Rates on Agricultural Products
| GST Rates | Agricultural Products |
|---|---|
| 0% | Organic Manures, Food Grains & Seed (Sowing), Pasteurized milk, Buttermilk, Fresh milk, Fresh Fruits and live fish. |
| 5% | Organic fertilizers, Coffee, Natural honey, Cashew nuts, Preserved vegetables, fruits and nuts, wool and animal leather |
| 12% | Farm Tractors and agricultural, horticultural or forestry machinery for soil preparation Sprinklers, drip irrigation systems including laterals, mechanical sprayers, Nozzles for drip irrigation equipment, or nozzles for sprinklers Micronutrients Fertilizers & Bio-Pesticides Vegetables, fruit, nuts, and other edible parts of plants prepared or preserved by vinegar or acetic acid Condensed milk and cheese, Butter, and other fat & oils derived from milk. Milking machines and dairy machinery. Jam, Jelly, Squash, Ketchup, Fruit juice & Vegetable juice |
| 18% | Pesticides, Tractor wheel, Tractor parts |
| 28% | Plastic pipes and luxury goods |
GST Exempted Agriculture Products
The agricultural products that are exempt from the GST -
The GST regulations exclude any agricultural products that are produced via farming or cultivation i.e., vegetables, produce, dairy, and fresh fish including Seeds and organic manure, but without packaging or brand labels.
As a result, all agriculture enterprises that do not engage in processing are excluded from the GST regime.
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