What's Happening?
The Indian Micro-Fertilizers Manufacturers Association (IMMA) is urging the government to implement significant policy changes in the upcoming Union Budget 2026. The association is advocating for the extension
of a 5% Goods and Services Tax (GST) to all fertilizers regulated under the Fertilizer Control Order (FCO). Additionally, they are calling for faster refunds of excess GST credits to alleviate working capital stress. IMMA also proposes a 'One Nation, One License' system to streamline operations and reduce bureaucratic delays.
Why It's Important?
The demands from the fertilizer industry highlight the challenges faced by manufacturers due to the current GST structure. The inverted duty structure, where higher GST is paid on raw materials compared to finished products, results in the accumulation of input tax credits, tying up essential working capital. Addressing these issues could empower manufacturers to invest more in product quality and production capacity, ultimately benefiting farmers with better access to quality fertilizers. The proposed unified licensing system could further enhance operational efficiency and reduce costs.
