Parliament Standing Committee Urges GST Cut on Tractor Components

 The Standing Committee on Agriculture, Animal Husbandry, and Food Processing has presented its Fifty-Eighth Report, focusing on "Research and Development in Farm Mechanisation for Small and Marginal Farmers." The report proposes several key recommendations to improve farm mechanisation, including standardisation of farm equipment, reduced GST on tractor spare parts, and prioritising the development of small machinery for small and marginal farmers.

Tractors, being the backbone of Indian agriculture, play a crucial role in various farm operations. However, with a majority of farmers owning small holdings of less than 2 hectares, the cost of purchasing farm equipment remains a significant challenge, even with available subsidies.

To address this issue, the Committee has recommended the implementation of single standards for farm equipment and attachments, which would be overseen by the Bureau of Indian Standards (BIS). By adhering to BIS specifications, all manufacturers would ensure compatibility, matching, and interchangeability in the production of farm implements.

Furthermore, the Committee highlighted the urgent need to promote agricultural mechanisation and enhance the quality and value addition of farm produce. To achieve this, they have urged the government to accord priority to the development of small equipment specifically designed for small and marginal farmers. Such measures aim to make agriculture more attractive and profitable, enabling farmers to cultivate second and subsequent crops.

Also Read:- First Ever 'Credit Guarantee Scheme' Unveiled to Boost Livestock Sector & Empower MSMEs 

Regarding tax implications, the Committee called for a reduction in the Goods and Services Tax (GST) levied on tractor parts and components for tractors up to 40 HP. The current GST rate of 12 percent could be reduced "suitably" to alleviate the financial burden on farmers.

While discussing the current state of farm mechanisation, the Committee noted the absence of a formal study assessing the situation in the country. The Indian Council of Agricultural Research (ICAR) has already submitted a proposal to the Department of Agriculture and Farmers Welfare (DOA&FW) on this matter. The Committee strongly recommended that the Department thoroughly examine ICAR's proposal, which includes identifying mechanisation gaps on a state-wise basis. Utilising real-time data, a hassle-free and effective plan can be formulated to benefit small and marginal farmers.

The Committee also acknowledged the efficacy of the Direct Benefit Transfer (DBT) portal as a single-window clearance system for equipment procurement by individual farmers. However, it suggested streamlining the clearance process for electronic agricultural equipment by involving the Department of Electronics in a unified procedure.

Also Read:- CLAAS Launches New Line of High Horsepower 4WD Tractors at Ag In Motion

Furthermore, to ensure the accessibility of agricultural machinery and expertise at the grassroots level, the Committee proposed the establishment of a Directorate of Agricultural Engineering in each state, similar to the existing ones in Madhya Pradesh and Tamil Nadu. These directorates would facilitate demonstrations, training, repairs, maintenance, and guidance for farmers at the block and district levels.

The recommendations put forth by the Standing Committee aim to boost farm mechanisation, reduce financial burdens on small and marginal farmers, and improve the overall efficiency and productivity of Indian agriculture. With the implementation of these measures, it is hoped that farming practices will become more sustainable, leading to enhanced income and prosperity for farmers across the nation.

Also Read:- Explainer: Why India Banned Export of Non-Basmati White Rice?