Micro-fertiliser industry seeks uniform 5% GST, faster credit refunds ahead of Budget

The Indian Micro-Fertilizers Manufacturers Association has urged the Centre to extend the 5 per cent GST across all fertilisers notified under the Fertiliser Control Order, expedite refunds of excess GST credits, and implement a unified licensing system ahead of the Union Budget.

While acknowledging GST 2.0 as a “landmark reform” for the sector, particularly the reduction in GST from 12 per cent to 5 per cent on Schedule 1G items and their mixtures, the industry body said manufacturers are now facing an inverted duty structure on certain inputs where raw materials and services attract higher GST than finished products.

“This results in accumulation of excess input tax credit, locking up working capital for manufacturers,” said Rahul Mirchandani, president of the association and chairman of Aries Agro Limited.

The association has called for a “clear and time-bound mechanism” for quick refund of excess GST credits, especially for sectors operating under price-sensitive and regulated regimes like fertilisers. “Faster refunds will directly ease working capital stress and enable manufacturers to invest more in quality, capacity, and farmer outreach,” Mirchandani said.

On ensuring parity across the fertiliser ecosystem, the industry body has pressed for the 5 per cent GST rate to be extended uniformly to all fertilisers notified under the Fertiliser Control Order (FCO).

“A common GST rate will ensure a level playing field, prevent classification disputes, and promote innovation without tax distortions,” Mirchandani said in a statement issued on Sunday.

The association has also sought the implementation of ‘One Nation, One Licence’ to improve ease of doing business. It has proposed a centralised digital repository for all licence-related documents, accessible to all state governments, to enable seamless verification and faster issuance of marketing permissions.

“The current practice of state-wise and, in some cases, district-wise licences leads to duplication, delays, and avoidable compliance costs. Rationalising this framework will significantly reduce friction for manufacturers and ultimately benefit farmers through faster access to quality products,” Mirchandani said.

Published on January 11, 2026