The Union Finance Ministry has assured the Indian Micro-Fertilizers Manufacturers Association (IMMA) that it will consider the industry's request for a uniform GST rate on all micronutrient fertilisers covered under the Fertiliser Control Order (FCO).
The assurance came during a meeting between IMMA representatives and senior officials of the CBIC in New Delhi on September 12. Ministry officials clarified that the matter would be reviewed in consultation with the Agriculture Ministry before a decision is taken.
Industry Seeks 5% GST for All Fertilisers
The IMMA urged the government to keep all fertilisers, whether subsidised or non-subsidised, inorganic, organic or mixed, including micronutrient fertilisers and mixtures under the 5% GST slab. Currently, multiple GST rates apply, creating what the industry calls an "inverted duty structure."
Officials acknowledged this concern but stated that the inverted duty problem will continue as long as multiple GST rates remain in force. On the issue of refunds for stock-in-trade, they clarified that such refunds are not permissible under existing law and dealers are expected to adjust input tax against future GST liabilities.
Refunds for Inverted Duty
Responding to manufacturers' demands, officials agreed to fast-track refunds for the inverted duty structure, where input taxes are levied at 18% while output supplies are taxed at just 5%. They assured the industry that a speedy refund notification would be issued alongside the rollout of GST 2.0 from September 22.
The IMMA pressed for a time-bound refund mechanism, proposing a 30-day service level agreement to ensure working capital efficiency for fertiliser manufacturers.
Concerns Over Higher GST Slabs
Industry representatives also cautioned the government against shifting fertilisers into the 18% GST bracket, warning that such a move would raise farm-gate prices, block working capital and ultimately hurt both farmers and fertiliser makers.
In response, ministry officials noted that the matter would be taken up during GST 2.0 deliberations, but stopped short of confirming any rate change.
Industry Commitment to Farmers
The IMMA assured officials that the industry remains committed to anti-profiteering measures. It pledged that any tax savings would be directly passed on to farmers through reduced MRP or price stability, ensuring immediate benefits once a uniform GST framework is notified.
With GST 2.0 set to launch from September 22, the coming weeks will be crucial in determining whether the fertiliser industry gets the clarity and relief it has been seeking on taxation.
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