Fertiliser and Tractor Industry Flag GST Transition Concerns in Meeting with CBIC

Last updated: 15 September 2025

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Representatives from the fertiliser and tractor industries have met with the Central Board of Indirect Taxes and Customs (CBIC) to highlight issues arising from recent GST rate cuts. While the cuts aim to reduce costs for farmers, the industry warns that accumulated input tax credits and tax inversion could hinder the intended benefits. The fertiliser sector faces blocked credits on existing inventory, and the tractor industry is concerned about tax inversion and credits stuck with dealers. The CBIC has acknowledged these concerns and indicated that relief measures might be introduced by the end of the year.

The agriculture sector held discussions with officials of the CBICto address challenges arising from the recent GST rate cuts on fertilisers and related products. While the move was aimed at lowering farm input costs, industry representatives warned that accumulated input tax credits (ITC), tax inversion and uneven implementation could dilute the intended benefits. Fertiliser Industry Concerns Rahul Mirchandani, President of the Indian Micro-Fertilizers Manufacturers Association, said nearly

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FAQ :

The meeting was held to address challenges and concerns arising from the recent GST rate cuts on fertilisers and related products, and to discuss tax inversion issues in the tractor industry.

The fertiliser industry flagged concerns about approximately Rs 400 crore worth of accumulated input tax credits on existing inventory that may remain blocked due to the rate change. They also noted that the rate cut doesn't cover all micronutrients, potentially limiting cost reductions.

The tractor industry raised concerns about ongoing tax inversion in certain goods taxed at 18% and about Rs 800-900 crore worth of accumulated credits stuck with dealers.

CBIC officials acknowledged the concerns raised by both industries and indicated that possible relief measures could be announced later this year to help smooth the transition.

Tax inversion, as highlighted by the tractor industry, refers to a situation where taxes on inputs are higher than taxes on the final product, leading to a disadvantage.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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