With low tax, fertilisers prices to come down marginally: Minister

Prices of fertiliser will come down marginally with the GST rate being revised to 5 per cent from earlier proposed 12 per cent, Union Fertilizer Minister Ananth Kumar said here on Saturday.

The reduced GST rate will bring down burden on farmers by Rs 1,261 crore. Prices of urea, DAP, MoP, and mixed fertilisers will come down marginally with reduction in GST rate from 12 per cent to 5 per cent, the Minister told reporters here.

The GST Council meeting held on Friday evening reduced the GST rate on fertilisers to 5 per cent from 12 per cent proposed earlier, because of apprehensions of rate of crop nutrient going up.

Post GST, the average weighted MRP will decrease to Rs 5,909 per tonne (or Rs 295.47/50 kg bag) as compared to the existing all-India weighted average of Rs 5,923 per tonne (or Rs 296.18 per 50 kg bag).

Under the GST regime, there will be a uniform MRP of Rs 295.47 per 50 kg bag across the country except few states where additional VAT is charged on natural gas. However, even in these states MRP will reduce by Rs 3 per 50 kg bag.

Similarly, the MRP of P&K fertilisers, for which the prices are not administered, are also expected to come down on an average basis as the incidence of tax will be lower than the existing tax. The Minister urged the industry to pass on the benefits to farmers.

Retail price of urea, which is fixed by the government, is at Rs 5,360 per tonne now. The prices of DAP and potash, fixed by private companies, are at Rs 22,000 and Rs 11,000 per tonne, respectively.