According to the State Administration of Taxation Tax August 10, 2015 document [2015] No. 90 notice, since September 1, 2015, for the sale and import of fertilizers taxpayers unified tax rate of 13% levy domestic sectors and import VAT, Potash VAT refunded policy and stop execution.
Policies for urea, phosphate, fertilizer companies less affected, these fertilizer companies in sales and production processes have a certain input tax can be deducted, phosphate fertilizer production enterprises are mostly independent right to import, the import of raw materials, when the input tax has been VAT included, deductible part of the tax, the cost of production will not increase too much. The impact on the potash industry is large, especially in small and resource-based potash imported potash business, you can deduct the proceeds.
China's largest manufacturer of resource-based potassium - SDIC Xinjiang Lop Nur Potash Co., Cancel "refunded" policy, will increase the company's tax burden, according to the current SDIC Luo K Potassium price 2800 yuan / ton, after deducting the amount of input tax, the tax burden will directly increase the cost of 300 yuan / ton.
Meanwhile, the National Development and Reform Commission issued "on the adjustment of railway freight rates further improve the price formation mechanism of the notice" (NDRC Price [2015] No. 183) on January 29, 2015, which allows the floating rail freight does not exceed the 10% formally implemented since August 1, 2015, the estimated base price plus shipping costs after the tariff adjustment of potassium freight costs will increase only about 75 directly yuan / ton.
VAT, will increase the cost of the two rail freight nearly 400 yuan / ton, how to pass and absorb rising costs is a recent problem faced by potash, the most likely scenario is that this part of the cost will be allocated to the production, distribution and consumer all aspects of the case depends on the implementation details of the policy, may eventually be passed on to the bigger proportion of farmers who, in the long run, increase their production costs, the state should be appropriate to increase the prices of agricultural products or subsidies.