The present government has given due recognition to the needs of empowering our farming community and strengthening of the Agriculture and Allied sectors. Honourable Chief Minister has envisioned a gradual movement towards an era free of taxes for farmers who toil in fields to produce food for us all. In pursuance of this vision, the Government provided wide ranging tax relief to the farmers last year to catalyze their various farming activities. I propose to carry out this exercise further through my budget proposals.
Pesticides, weedicides and insecticides are very crucial inputs for protection of crops. Last year, I exempted pesticides, weedicides and insecticides from the levy of Toll. From the next financial year, I propose to exempt the sales of all these items from levy of VAT.
Commercial floriculture and vegetable farming are sun-rise industries of the State. Use of Poly Houses and Green Houses is the latest technology beneficial in farming activities, particularly floriculture, vegetable cultivation and raising of nurseries. Presently, installation of green houses attracts Service Tax at the rate of 10.5% while sale of various individual components used in manufacturing of these Green Houses attracts VAT at varying rates. In order to boost the use of this technology in Farming sector, I propose to exempt installation of these Poly Houses and Green Houses from the levy of Service Tax.
VAT/ GST on micro irrigation systems:
Micro irrigation is need of the hour. It is necessary in the interest of conservation of our water resources as also to ensure critical irrigation to various crops in horticulture, floriculture and agriculture sectors. The department of agriculture has planned to promote use of micro irrigation techniques in private farms and orchards. In order to ensure that the farming community gets these vital irrigation inputs at cheaper rates, I propose to introduce a system of full refund of tax chargeable under the J&K VAT/ GST Acts, to all such beneficiaries who buy these equipments and systems from manufacturers and suppliers or install them in their green houses, fields, orchards and farms or through contractors. I would urge the farming community to come forward to take full advantage of this Government initiative.
Milch animals like cows and buffaloes purchased from outside the State are presently subjected to Toll. I propose to exempt these milch animals from levy of toll in the interest of promotion of Dairy farming and increasing production of milk in the State. Toll on animal/ poultry feed ingredients:
Rice bran and wheat bran are being imported into the State for use as poultry and cattle feed. Continuing with the present policy of the government to boost the Agriculture and allied activities, I propose to exempt the import of these commodities from payment of Toll.
During the last annual budget, I had announced exemption from payment of Toll on the bee hives and the bee colonies transported seasonally through Lakhanpur. It has been brought to my notice that outward movement is still attracting Toll. I propose to exempt such outward movement also from payment of Toll along with their inward movement.
All the earlier mentioned exemptions are intended to increase economic empowerment of the farmers and agriculturists. I have a sanguine hope that the entire benefit of these tax concessions shall be passed on to them. If I get any indication that the intended benefits are not flowing to the farmers, I will not hesitate to withdraw them.
Many states, including those in our neighborhood are ging VAT at the rates ranging from 4% to 5% on atta, maida, suji, besan, paddy, rice etc. For these states, this source of VAT adds substantial amounts to their exchequer. In our State also, keeping these commodities out of tax net means sacrifice of revenue worth a couple of hundred crore of rupees annually. The current year has witnessed rise in prices, particularly in food items as an All India phenomenon. As part of the Government endeavour to keep the food grain prices under check, I am prepared to forego this amount for another year and announce continuation of exemption from levy of VAT on these commodities up to 31st March 2012.