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Zero Rate GST Good for Farmers but May Increase Burden for the States
May 25, 2017
The decision of levying a zero rate GST on all primary produce such as fruits, foodgrains, vegetables, etc. will certainly serve as an encouragement for the agriculture industry. However, the same may also put the states, which currently levy a VAT around 5% and additional mandi/market cess of 2%, etc., under financial strain.
Zero duty on farm produce is certainly a welcoming move taken by the GST council as due to the current taxation system, which is unviable for the producers, there aren’t enough flour mills in a grain bowl such as Punjab, Commission for Agricultural Costs & Prices former chairman Ashok Gulati said. However, the same will force to states to cover for the revenue loss, he added.
