Issues such as levy on warehousing, agri-project imports pose a challenge
With the introduction of Goods and Services Tax (GST) — India’s biggest reform in the tax structure — the government has succeeded in moving a step closer towards making the country a unified common market, leading the nation’s economy towards growth and sustainability.
India’s fast-moving consumer goods (FMCG) sector has grown consistently over the past three years, reaching over $25 billion in retail sales. We believe that the implementation of GST and the opening of foreign direct investment (FDI), especially in the food processing, has enabled the growth of the industry and raised market potential to grow over 12-13% percent in 2018.
The agricultural sector continues to remain the largest contributing sector to the GDP with a share of 16%. The onset of GST in the sector is encouraging industry players/stakeholders to go beyond the boundaries of cities and States and create one-of-a-kind national market for agricultural goods with a clear and hassle-free supply chain which would lead to the free movement of agri-commodities across India.
Further, the promotion of the National Agriculture Market (NAM) by the Centre in accordance with the GST has created scope for increased transparency and impartial trade of agri-commodities without the restrictions of multiple taxation.
Agricultural produce
Considering the perishable nature of the agri-commodities, improved supply chain mechanism due to GST would re-write the scope of profitability for farmers.
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