Micro-fertiliser industry urges uniform GST reform ahead of Union Budget

The Indian Micro-Fertilizers Manufacturers Association (IMMA) has written to the Union Government pressing for major policy changes ahead of the Union Budget 2026–27 to support the fertiliser sector’s competitiveness and ease of business.

In its pre-budget recommendations, the industry body has urged the Centre to extend the reduced 5 per cent Goods and Services Tax (GST) uniformly to all fertilisers notified under the Fertiliser Control Order (FCO).

Advertisement

The call comes even after the introduction of GST 2.0, which cut tax rates on certain Schedule 1G items and their mixtures from 12 per cent to 5 per cent, a move the association described as a “landmark reform” but one that still leaves an inverted duty structure on certain inputs where raw materials and services attract higher GST than finished products.

The IMMA highlighted that the current tax mismatches result in accumulated input tax credits that tie up working capital for manufacturers. To address this, it has proposed a clear and time-bound mechanism for faster refunds of excess GST credits, particularly important for sectors like fertilisers that operate under price-sensitive and regulated regimes.

Industry representatives say quicker refunds would ease liquidity stress and enable reinvestment in quality, production capacity and farmer outreach.

Another key recommendation is the implementation of a single, unified licensing system, often described as a ‘One Nation, One Licence’ framework, to streamline regulatory compliance and reduce duplication.

Currently, state-wise and even district-wise licensing increases administrative burden and delays, the association said.

A centralised digital repository for all licence-related documents accessible by states could speed up verification and issuance of marketing permissions, reducing costs and improving market access for fertiliser manufacturers.