The Goods and Services Taxes came into effect on Saturday morning after the announcement by Prime Minister Narendra Modi. On Friday night, the GST council has decided to reduce the tax rate on fertilizers to 5 percent from the previously decided 12 percent.
The GST Council head, Finance Minister Arun Jaitley and the other representatives of states said this decision was taken as it was predicted a 12 percent tax would lead to an increase in the price of the crop nutrients.
In a relief to the farmers, the GST council also cut the tax rates on parts of tractors from 28 percent to 18 percent. Jaitley said after the 18th meet of the council that, “Some felt it (12 per cent GST rate) may be a burden on the consumer. There was a consensus (in the GST Council) to bring the rate to 5 percent.” The meeting was for Thanksgiving and had no formal agenda. However, the farmer’s cause came up through discussion, which led to the decision.
The meet was also attended by the Prime Minister Narendra Modi which was followed by dinner for a special Thanksgiving. The decisions have been taken by the panel after the initial announcement in September 2016.
The council met for the first time on September 23, 2016, and has met 18 times after that. Issues from drafts of supporting legislations to GST rules, rates of taxes and fitting over 1200 goods and services in the four tier structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent were framed in these meetings.
Jaitley did not elaborate on the issue but did say that the council approved these additions.
