The Federation of Seed Industry of India (FSII) has welcomed the GST Council's recommendation to exempt storage and warehousing services for seeds meant for sowing, while asking the government to clarify two other tax proposals that could raise costs or tie up working capital.
The recommendations came from the 57th GST Council meeting, held recently in New Delhi. Seeds themselves stay nil-rated under GST, but the tax paid on storing and warehousing them has so far been a cost the industry could not recover. Exempting it should ease that burden at a critical point in the supply chain, when seed quality and viability must be preserved ahead of the sowing seasons, the federation said.
FSII also welcomed measures aimed at exports, including faster, system-based refunds and wider eligibility for refunds of input tax credit on capital goods, which could improve cash flow for seed exporters. Proposed changes to e-way bill interception, GST registration and penalties could cut compliance work for seed companies, dealers and distributors, which often move consignments across state lines within narrow sowing windows.
"Quality seed is the foundation of farm productivity, and every measure that reduces costs across storage, movement and exports ultimately strengthens farmers' access to it," said FSII chairman Ajai Rana. He said the federation would work with the government on implementation so that no part of the industry faces a disproportionate cost or compliance burden.
The two proposals FSII wants examined are a 5 percent GST without input tax credit on specified e-commerce delivery services, and a 2 percent tax deducted at source on specified business-to-business transactions in waste and scrap. Both could affect costs or working capital, the federation said, and it will seek clarity on how they apply to the seed sector.
Most of the procedural reforms recommended by the Council are expected to take effect from 1 April 2027.
The report was written by Ajeet Singh for Rural Voice.
Photo: CIAT / Wikimedia Commons (CC BY-SA 2.0)
Source: Rural Voice
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