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  1. Farm Machinery to be costlier due to GST & hamper from Mechanization

    S. Avtar Singh, President-CICU & S. Upkar Singh General Secretary-CICU said that as GST is to be implemented from 1st July 2017, the farm machinery which was earlier exempted from VAT and Excise duty but GST rate 12% has been set on farm machinery, so it will be costlier by 12%. For example the agriculture Implements like Rotavator or Thrasher which having earlier price of Rs. 1,00,000/- (Rs 1 Lacs) will be expensive by Rs. 1,12,000/-

    According to study conducted by McKinsey & CII, food grain consumption will be double by 2030. Each year, there will be an increase of 4% in Food consumption from Rupees 11 Trillion to 22.5 Trillion by 2030. This equates to the growth of per-capita consumption from Rs 9360 to 15390.

    One of the prime factors to increase production is farm mechanization.

    Farm Mechanization has following advantages:

    • Increase in productivity:                            12-34%
    • Saving in seeds:                                             20%
    • Saving in fertilizer:                                      15-20%
    • Enhancement in cropping intensity:        5-22%
    • Increase in gross income of farmer:          29-49%

    Further, adoption of farm machinery is very low in India compared to U.S.A. & Europe. At present tractors are being used in 21.30% of farmland whereas rest of area is being proceed by bullock & even manually.

    In order to make available various agricultural implements and machines at cheaper rates, assistance in the form of subsidy @ 25%to 50% of the cost of equipment/machine with permissible ceiling limits is available to all category of farmers for the purchase of various agricultural equipment’s under various schemes of the Department of Agriculture and Cooperation such as  Macro Management of Agriculture, National Food Security Mission, Rashtriya Krishi Vikas Yojana, National Horticulture Mission etc.

    On one side Government subsidise Implements to make farmer adopt farm mechanization, on other side by charging GST it will be costlier & unviable to farmers.

    S. Avtar Singh, President-CICU & S. Upkar Singh General Secretary-CICU request in their representation GST council & Sh. Arun Jaitly finance minister to waive off GST on Farm Machinery.