The Indian fertiliser industry struggles under the current Goods and Services Tax (GST) system. Phosphatic and Potassic (P&K) fertilisers face only 5% GST, but essential raw materials such as ammonia and sulphuric acid attract 18%. Packing materials and other inputs also fall in higher tax slabs.
This imbalance creates a major challenge. Fertiliser companies pay far less output tax than the input tax credit (ITC) they receive. As a result, large amounts of ITC remain unused. Since the GST system does not allow refunds for this accumulated credit, companies face liquidity stress and delays in procuring raw materials.
To highlight these concerns, a delegation from the Fertiliser Association of India (FAI) met Union Finance Minister Nirmala Sitharaman on 26th August 2025. The delegation included:
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Dr. P.S. Gahlaut, Managing Director, Indian Potash Limited
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Dr. Suresh Kumar Chaudhari, Director General, FAI
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Mr. S. Sankarasubramanian, Co-Chairman, FAI and Managing Director & CEO, Coromandel International Limited
The leaders urged the Government to cut GST on raw materials from 18% to 5%. They also requested a refund system for accumulated ITC caused by the subsidy portion being non-taxable. They formally submitted their representation to the Finance Minister.
The industry now waits for a positive outcome. A policy change would release blocked funds, improve raw material procurement, and strengthen fertiliser availability for farmers across India.
