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India Dairy Farmers to Benefit from GST Tax Exemption
July 23, 2018

The GST Council exempted many minor forest produce (MFP) and artificial insemination (AI) services for cattle from the tax, providing much-needed reprieve to tribals, who depend on MFP collection for livelihood, and dairy farmers across the country.

While reducing GST on MFP products such as sal leaves, siali leaves and sabai grass ropes from five per cent to nil would benefit millions of tribals in many States including Andhra Pradesh, Chhattisgarh and Odisha, the waiver of GST on AI services would go a long way in improving productivity of livestock in the country.

The GST exemption, however, is not available for artificial insemination of horses.

The GST Council also exempted those unincorporated and non-profit organisations offering services such as extension to farmers.

The Council also clarified that milk fortified with vitamins and other nutrients is exempt from GST just is the case with normal milk.

Organisations working for tribal rights have been questioning the logic behind taxing MFP saying it violated the spirit of the Forest Rights Act and created unnecessary roadblocks for the forest-dwelling communities to translate their rights into livelihood.

The move to exempt artificial insemination services from GST is in line with the Government’s objective to improve the productivity of bovines. The average annual milk yield of Indian cattle is said to be 1,172 kg, which according to the Food and Agriculture Organisation is just 50 per cent of the global average. According to a study that appeared in the Journal of Applied Animal Research last year, only 25 per cent of Indian diary farmers have fully adopted artificial insemination for their cattle, while majority fell in partial adoption category.

Source: The Hindu Business Line



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