The Rig Owners and Agents Welfare Association in Madurai expressed their concerns regarding the absence of clear government instructions exempt GST on rig/borewell work which is used for agricultural activities. According to the association members, farmers were burdened with paying 18% GST due to the lack of clarity.
Note: Madurai District Rig Owners and Agents Welfare Association is demanding a GST reduction in borewell services. They have been trying to speak with the Union Minister about this issue, and asking for help in the upcoming 54th GST Council meeting.
In a petition addressed to the Prime Minister and the Finance Minister, the association members requested that borewell works, which are predominantly used for agricultural purposes and constitute around 90% of it, be categorized under the 5% GST slab.
The association members emphasized their indirect contribution to national development by facilitating water access to the farmers of the nation, which is a vital resource for farming.
They stated that there was clarity regarding the applicability of tax to rig/borewell operations used for agricultural activities, during the service tax regime.
The primary fuel for rig operations is diesel. However, the recent GST Council meeting did not provide any clear notification regarding the inclusion of petrol and diesel under the GST framework, complicating matters related to rig operations for agricultural purposes.
The Madurai district president of the association for the rig/borewell operations stated that the petition also called for a one-time amnesty scheme for rig/borewell operations since the implementation of GST.
