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Thank you shipra, I will now discuss about the impact of GST on the agriculture sector of India and on
Indian farmers.
Now, Agricultural sector has been the root of Indian economy and it contributes around 18% to GDP. Also,
about 52% of the rural livelihood depends on this sector as their primary means of livelihood, so it
becomes important to study the impact of GST on the Agriculture sector.
As per the GST Act, farmers or agriculturists are not liable to pay any GST or even register for the GST. An
agriculturist is any individual or HUF who cultivates their land via; – Individual labour – Labour of family –
Servants who help on paying wages in cash or kind -Hired labour under the supervision of any sort.
The major problem in the agricultural sector is that the farmers are unable to get the actual value for
their agricultural products. Also, the transportation of agricultural products beyond the state boundaries
throughout India is challenging task. GST helped through such problems.
• Execution of GST was expected to boost the agricultural market as it would make the movement of
agricultural commodities hassle free as the products would be able to reach places via trucks in a
better way.
• Interstate trading of an Agri-product were often subjected to various taxes, permission, licenses.
Implementing GST helped in liberalizing the marketing of agricultural products and creating a smooth
transaction of goods.
• Agricultural products were always subject to diversity in the taxation rates so GST would benefit the
national agricultural market and help the farmers to sell their products in any part of the country and
receive the best price for their product.
• GST is essential to improve the transparency, reliability, and timeline of supply chain mechanism. A
better supply chain mechanism would ensure a reduction in wastage and cost for the
farmers/retailers. GST would assist in reducing the cost of heavy machinery required for producing
agricultural commodities.
