The proposal to define poultry farms as an agriculture-based manufacturing unit in the draft rules of Karnataka Gram Swaraj and Panchayat Raj (Gram Panchayat’s Tax, Rate and Fees) Rules, 2021, and making them assessable for taxes is being opposed by the poultry sector. A delegation comprising representatives of Karnataka Poultry Farmers’ and Breeders’ Association (KPFBA) and National Egg Co-ordination Committee (NECC) met officials of the Department of Rural Development and Panchayat Raj as well as Animal Husbandry earlier this week to submit their objections to the draft rules published on December 29, 2021. They argue that poultry farms cannot be defined as ‘buildings used for agriculture-based manufacturing units’, which makes them assessable for tax under the rules. Contending that poultry farms do not fall under the purview of Karnataka Gram Swaraj and Panchayat Raj Act 1993, KPFBA president Sushanth Rai said poultry farms come under Karnataka Land Reforms Act that recognise poultry farming as agriculture. Section 2 (1)(d) of the Act had said that ‘agriculture included aquaculture, horticulture, dairy farming, poultry farming, breeding of livestock and grazing’, he claimed. Also, he said that the Karnataka Land Reforms Act does not mandate the need for conversion of agriculture land where poultry farms are set up. “Poultry farming itself is agriculture, and poultry farms are mostly on agricultural land,” he said. Unless the lands are converted under Section 95 of the Karnataka Land Revenue Act, poultry farms cannot be assessed for taxes by the local bodies, much less the gram panchayats, Mr. Rai claimed before adding that inclusion of poultry farms under the definition of agriculture-based manufacturing unit is ‘not only illegal, but also untenable’. He contended that poultry farming is not a commercial, but an agricultural activity. “Poultry farming is not a manufacturing process where some agriculture-based raw materials are used, processed and a new product is manufactured. It is an agricultural activity, much like sericulture where silkworms are cultivated to produce silk,” he said. Endorsing the contention of KPFBA, the NECC said the draft rules were ‘discriminatory’ and would force many poultry farmers to shut operations in Karnataka, which is already procuring about 50 lakh eggs from other States every day. The NECC representative pointed out that no other State had come out with such a legislation.

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