Farmers Bear Burden as Rig/Borewell Operations Face Ambiguity in GST Treatment
In a recent development, the Rig Owners and Agents Welfare Association in Madurai voiced concerns over the lack of clear guidelines from the government regarding the exemption of rig and borewell operations used for agricultural activities from the Goods and Services Tax (GST). As a consequence, farmers find themselves burdened with an 18% GST on these essential operations.
According to the association members, who have submitted a petition to both the Prime Minister and the Finance Minister, approximately 90% of borewell operations are directly linked to agricultural activities. They argue that these operations should be reclassified under the 5% GST slab, considering their crucial role in supporting the agricultural sector.
Highlighting their indirect contribution to the nation's development, the association members emphasize that by facilitating water access for farmers, they play a vital role in ensuring a steady supply of the primary resource for cultivation. They draw attention to the fact that during the service tax regime, there was more clarity regarding the applicability of tax on rig and borewell operations used for agricultural purposes.
One significant aspect brought to light is the reliance on diesel as the primary fuel for rig operations. The association notes that despite various concerns and discussions surrounding the inclusion of petrol and diesel under the GST bracket, the recent GST Council meeting failed to provide any clear notification regarding the taxation of rig operations specifically for agricultural purposes.
In their petition, the association members are not only seeking clarity on the GST treatment but also advocating for a one-time amnesty scheme for rig and borewell operations since the implementation of GST. The President of the association stresses the importance of providing relief to the stakeholders involved in these operations, considering the critical role they play in supporting the agricultural backbone of the nation.
As farmers continue to grapple with the economic challenges in the agricultural sector, the plea from the Rig Owners and Agents Welfare Association sheds light on the need for a comprehensive and farmer-friendly approach in the tax treatment of essential operations that contribute significantly to the nation's food security and agricultural sustainability. The ball now rests in the court of the government to address these concerns and provide the necessary guidance and relief to the stakeholders involved.
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