Ahead of GST Council meet, cooperative bodies marketing arecanut seek tax cut to 5% on copper sulphate

The Hindu

02-07-2025

With the 56th Goods and Services Tax (GST) Council meeting likely to be held in July, cooperative bodies marketing arecanut in the State have sought a reduction in GST on copper sulphate from a maximum 18% to 5%.
Copper sulphate is a major ingredient in Bordeaux mixture, a fungicide used to control 'kole roga' (fruit rot disease) in arecanut plantations. The disease hits arecanut plantations when there is incessant heavy rains. The mixture is also used to control fungal diseases in crops such as coffee, rubber, cardamom, pepper, and ginger.
Arecanut farmers in coastal, Malnad belts and in some districts of central Karnataka are highly dependent on copper sulphate to control the disease.
Karnataka largest producer
The Union Minister of State for Agriculture and Farmers' Welfare Ramnath Thakur told the Lok Sabha on March 18 that Karnataka ranks first in arecanut production with 10 lakh tonnes from 6.8 lakh hectares out of a total production of 14.11 lakh tonnes from 9.4 lakh hectares in India, as per final estimate for 2023-24.
A. Kishore Kumar Kodgi, president of the Central Arecanut and Cocoa Marketing and Processing Cooperative (CAMPCO) Ltd, Mangaluru, told The Hindu: 'We have been writing to the Union government to revise the GST for copper sulphate from 18% to 5% since 2021, but to no avail.'
Copper sulphate price up
He stated that this year, CAMPCO has been selling copper sulphate to its grower members at ₹330 per kg, compared to ₹310 per kg last year. Private traders are selling it above ₹350 per kg.
The price increased this year due to higher copper scrap prices and also due to the classification of copper sulphate as an industrial product rather than a fertiliser. Industrial products are taxed at 18% GST, while fertilisers attract a lower 5% GST, Mr. Kodgi said.
The copper scrap, which was available at around ₹400-450 per kg (plus GST) in 2020, now costs around ₹850 per kg (plus GST). In addition, sulphuric acid, used in the manufacture of copper sulphate, which cost around ₹9,000 a tonne in 2024, now costs around ₹17,000 a tonne, pushing the prices of copper sulphate up, he said.
Multiple GST rates
'Multiple GST rates (5%, 12% and 18%) on products used for the same agricultural purpose (crop nutrition and protection) create classification ambiguities and compliance challenges,' Mr. Kodgi said.
Elaborating on this, he said copper sulphate is listed under Chapter 28 with HSN code 28332500 as a sulphate, attracting 18% GST. It is also categorised under the same chapter without an HSN code as a micro-nutrient, attracting a 12% GST. When classified as a fungicide under Chapter 38 with HSN code 3808, it attracts 18% GST.
'Uniform GST rate of 5% for all agricultural inputs, including copper sulphate, would ensure fairness, clarity, and affordability,' Mr. Kodgi said, adding that lower taxation will benefit many farmers.
Introducing a distinct HSN code or unified classification for copper sulphate used in agriculture would eliminate interpretational issues and streamline taxation, he said.
Benefit to farmers
Mahesh Hulkuli, vice-president of the Shivamogga-based Malnad Areca Marketing Cooperative Society (MAMCOS) Ltd, said that if the GST rate is slashed to 5%, then cooperatives can sell copper sulphate to farmers at approximately ₹280 per kg. Then, private traders will be forced to lower their selling rate, too, he said.
A delegation of arecanut stakeholders will meet Union Finance Minister Nirmala Sitharaman soon, although the cooperative institutions of Karnataka have been making this demand of the government for a long time, he said.
Gopalakrishna Vaidya, president of the Sirsi-based Totagars' Cooperative Sale Society (another arecanut cooperative), said that if the GST rate is revised to 5%, it will help lakhs of small and marginal growers.
'We have given a representation on the same to Revenue Minister Krishna Byre Gowda, who represents Karnataka in the GST council,' he said.