GST Dispute Leads to Suspension of Mustard Crop Procurement in Haryana’s Charkhi Dadri District

By: Admin
April 22, 2024
Categories: GST Recent News
4 Min Read

The imposition of the Goods and Services Tax (GST) on the purchase of the mustard crop by commission agents, known as arhtiyas, in Haryana’s Charkhi Dadri district has led to a suspension of the crop’s procurement for a period of four days. The discontent among the arhtiyas stems from a decision made by Hafed, the procurement agency, which has left them responsible for the GST payment. Their grievances are centered around the disparity between the procurement rate of mustard at Rs 5,650 per quintal and the GST incurred per quintal, which is Rs 282, compared to the mere Rs 70 commission they receive for their services in cleaning, packing, and loading the crop into Hafed’s storage facilities. The president of the Charkhi Dadri Anaj Mandi Arhtiya Association expressed frustration over the expectation for arhtiyas to cover the GST, questioning the rationale behind this demand given their limited role and the financial loss it entails. Efforts to resolve the issue involved discussions with local officials and the Member of Parliament, yet no resolution has been achieved.

The stance of Hafed’s management underscores a different perspective, emphasizing compliance with the state’s excise and taxation department’s directives. The organization’s general manager of procurement, warehouse, and finance and accounts division highlighted that arhtiyas are required to pay a 5% GST, with provisions for partial immediate reimbursement and the ability to claim the remainder later. The acting Hafed Managing Director further clarified the nature of the relationship between Hafed and arhtiyas as a principal-agent arrangement, underlining the legal expectation for GST to be levied in this context. Assurance was provided that GST charged on invoices would be refunded ultimately, aiming to ensure transparency in transactions.

Additionally, data from the Meri Fasal Mera Byora portal of the state government reveals significant mustard crop production within Charkhi Dadri district, with approximately 1.88 lakh acres registered, translating to an estimated 14 lakh quintals of mustard annually, based on the average yield of eight quintals per acre. This situation highlights the essential but limited role of arhtiyas in the agricultural supply chain, tasked with crop cleaning, packaging using Hafed-supplied materials, and loading for procurement, amidst the ongoing challenge posed by GST imposition on their operations