Budget 2026: Micro-fertiliser makers pitch reforms; call for uniform GST, single business licence system

The Indian Micro-Fertilizers Manufacturers Association (IMMA) has urged the Centre to consider a set of key policy measures in the upcoming Union Budget, including extending a uniform 5 per cent GST to all fertilisers covered under the Fertiliser Control Order (FCO), expediting GST credit refunds, and introducing a single, nationwide licensing system.

In a statement issued on Sunday, IMMA president Rahul Mirchandani said the association welcomed the government’s move under GST 2.0, particularly the reduction of GST from 12 per cent to 5 per cent on Schedule 1G items and their mixtures. However, he pointed out that manufacturers continue to face challenges due to an inverted duty structure, where the GST paid on raw materials is higher than that on finished products.

“This leads to the accumulation of excess input tax credit, effectively locking up manufacturers’ working capital,” said Mirchandani, who is also the chairman of Aries Agro Limited, according to PTI.

The association stressed the need for faster refunds of unutilised GST credits, especially in a price-controlled sector such as fertilisers. “Quicker refunds will directly ease working capital pressure and allow manufacturers to invest more in quality improvements, capacity expansion and farmer outreach,” Mirchandani said.

IMMA also reiterated its demand for a uniform 5 per cent GST rate across all fertilisers notified under the FCO. According to the association, a common rate would create a level playing field, reduce classification disputes and encourage innovation by removing tax-related distortions.

In addition, the body called for the implementation of a ‘One Nation, One License’ regime to improve ease of doing business. It proposed the creation of a centralised online repository of licence documents accessible to all states, which would streamline marketing approvals and cut down on paperwork.

Mirchandani noted that the current requirement of obtaining multiple licences across states and districts results in avoidable delays and higher compliance costs. Simplifying the licensing framework, he said, would help manufacturers operate more efficiently and ensure farmers gain quicker access to quality fertiliser products.