Many large companies to move Appellate Authority against GST demand notices
In recent days, an increasing number of GST notices have been sent to many companies mainly on account of alleged discrepancy in input tax credit (ITC).
Farmers may have to pay more for muriate of potash (MoP), a widely used soil-nutrient, as its retail prices are expected to go up due to higher GST rate, subsidy cut and strong global price movement.
However, fertiliser companies would take a call on price hike after the government notifies the Goods and Services Tax (GST) rates to be rolled out from 1 July.
Presently, MoP is being sold at Rs.11,000 per tonne. The rate was reduced by Rs.5,000 per tonne in July 2016 taking into account the sluggish global market.
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"MoP prices will most probably be higher this year because of the possible rise in cost of the fertiliser. The costs are expected to increase with the government fixing GST rate of fertilisers at 12 per cent," said PS Gahlaut Indian Potash Ltd (IPL) Managing Director.
Also, cut in the government subsidy on the commodity for this fiscal and rising global price trend could force companies to revise retail prices of MoP upwards during the kharif season beginning July, he said.
Gahlaut, however, did not indicate the extent of hike in prices, adding that the issue has been flagged to the Fertiliser Ministry.
"We are waiting for the GST notification to see if the subsidy portion is also taxed or not. Based on that, we will take a call," he noted.
The government has reduced the subsidy on MoP to Rs.7,437 per tonne for the 2017-18 fiscal from Rs.9,282 in 2016-17.
Moreover, MoP is quoting higher in the global market at above $227 per tonne, he said.
The country's almost entire potash demand is met through imports. IPL is the country's largest importer of MoP. It imported 4 million tonnes in 2016-17 fiscal from countries like Belarus, Russia and Canada.
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