Rig Owners, Farmers forced to pay huge GST; Seek Clarification

Farmers were compelled to face the heavy burden of paying 18% GST since the government did not issue a clear notification or guidelines exempting rig/borewell operations utilised for agricultural activities from GST, according to the Rig Owners and Agents Welfare Association, Madurai.

The members of the group argued in a petition to the Prime Minister and the Finance Minister that because 90% of borewell operations were for agricultural purposes, they should be included within the 5% GST slab.

The association members stated that during the service tax regime, there was clarity regarding the applicability of the tax for rig/borewell operations used for agricultural activity, implying that they were indirectly contributing to the nation’s development by assisting farmers in obtaining water, their primary resource for cultivation.

Diesel was the primary fuel used in rig operation. However, because of the multiple challenges associated with putting fuel and diesel into the GST bracket, they claim that the recently conducted GST Council meeting did not release any clear notification addressing rig operations for agricultural reasons.

According to B. Suresh, Madurai district president of the organisation, the petition also requested a one-time amnesty plan for rig/borewell activities since the launch of GST.