“The nation is grateful to Prime Minister Shri Narendra Modi and the Finance Minister for the GST reforms”: Union Agriculture Minister Shri Shivraj Singh Chouhan

“New chapters of growth will be written in agriculture, and we will see positive results in every sector” – Union Agriculture Minister Shri Chouhan

The new GST (Goods and Services Tax) rates mark a major transformation in the agriculture and dairy sectors. With the reduction in GST rates, farmers, agricultural and dairy workers, and livestock owners across the country are expressing joy and gratitude to Prime Minister Shri Narendra Modi and Union Finance Minister Smt. Nirmala Sitharaman. Union Agriculture Minister Shri Shivraj Singh Chouhan termed the new rates a revolutionary decision, expressing hope for historic changes.

The impact of the GST reforms will be widely seen among small and medium farmers. Lower GST on agricultural machinery and solar-powered equipment will reduce farming costs and increase farmers’ profits. GST has been reduced on bio-pesticides and micronutrients, which will benefit farmers and encourage a shift from chemical to bio-fertilisers. In the dairy sector, milk and cheese will now attract zero GST, benefitting not only common citizens but also farmers, livestock owners, and dairy producers. The GST reforms will also promote integrated farming. Clear benefits will be visible in animal husbandry, beekeeping, fisheries, agroforestry, and poultry farming. Reduced GST on tendu leaves will strengthen the livelihood of tribal communities, while lower GST on commercial goods vehicles will make the transportation of farm produce cheaper.

Prices Down, Profits Up

Tractor prices to reduce

Tractor parts to get cheaper

Agricultural equipment to become more affordable

Solar-powered irrigation devices will get cheaper

Fertilisers to cost less

Pesticides to get cheaper

Fruits and vegetables will get cheaper

Nuts to cost less

Boost to food processing

No GST on milk and cheese

Promotion of indigenous products

GST reduced on ‘prepared/preserved fish’

Natural honey to cost less

Reduced GST on tendu leaves

Detailed impact of GST cuts on various sectors

Agricultural Mechanisation

• GST on tractors (<1800 cc) reduced to 5%.
• Tractor parts, including tyres, tubes, hydraulic pumps: GST cut from 18% to 5%.
• Sprinklers, drip irrigation, harvesting machinery, tractor parts: GST cut from 12% to 5%.
• Fixed speed diesel engines (>15 HP), threshing/harvesting machines, compost machines: GST cut from 12% to 5%.
• Lower tractor prices will make mechanisation accessible to small and medium farmers, saving time, reducing labour costs, and improving productivity. 

OLD AND NEW GST DIFFERENCE CALCULATION FOR VARIOUS SOME OF THE POPULAR AGRICULTURAL MACHINERY & EQUIPMENTS :-
Sl.No.	Name of Agricultural Machinery & Equipment	Basic cost of Agricultural Machinery & Equipment (Rs.)	Present GST rate @ 12 (Rs.)	Total Cost with 12% GST (Rs.)	Upcoming Revised GST rate @ 5% (Rs.)	Total cost with revised GST @ 5% (Rs.)	Saving (Rs.)
	Tractor 35 HP	5,80,000	69,600	6,50,000	29,000	6,09,000	41,000
	Tractor 45 HP	6,43,000	77,160	7,20,000	32,150	6,75,000	45,000
	Tractor 50 HP	7,59.000	91,080	8,50,000	37,950	7,97,000	53,000
	Tractor 75 HP	8,93,000	1,07,160	10,00,000	44,650	9,37,000	63,000
	Power Tiller 13 HP	1,69,643	20,357	1,90,000	8,482	1,78,125	11,875
	Paddy Transplanter- 4 row walk behind	2,20,000	26,400	2,46,400	11,000	2,31,000	15,400
	Multicrop Thresher - 4 tone/ hr capacity	2,00,000	24,000	2,24,000	1,0000	2,10,000	14,000
	Power weeder - 7.5 hp	78,500	9,420	87,920	3,925	82,425	5,495
	Trailer 5 tone capacity	1,50,000	18,000	1,68,000	7,500	1,57,500	10,500
	Seed Cum Fertilizer Drill - 11 tyne	46,000	5,520	51,520	2,300	48,300	3,220
	⁠Seed cum Fertiliser Drill - 13 Tine	62,500	7,500.00	70,000	3,125.00	65,625	4,375
	Harvester Combine 14 feet Cutter Bar	26,78,571	3,21,428	30,00,000	1,33,928	28,12,500	1,87,500
	Straw Reaper 5 feet	3,12,500	37,500.	3,50,000	15,625	3,28,125	21,875
	Super Seeder 8 Feet	2,41,071	28,928.57	2,70,000	12,053	2,53,125	16,875
	⁠Happy Seeder 10 Tine	1,51,786	18,214	1,70,000	7,589.29	1,59,375	10,625
	Rotavator 6 Feet	1,11,607	13,392	1,25,000	5,580	1,17,187	7,812
	Baler Square 6 feet	13,39,286	1,60,714	15,00,000	66,964	14,06,250	93,750
	Mulcher 8 Feet	1,65,179	19,821	1,85,000	8,258	1,73,437	11,562
	⁠Pneumatic Planter 4 Row	4,68,750	56,250	5,25,000	23,437	4,92,187	32,812
	⁠Sprayer Tractor Mounted 400 Liter capacity	1,33,929	16,071	1,50,000	6,696	1,40,625	9,375

Fertilisers

• Ammonia, sulfuric acid, nitric acid: GST reduced from 18% to 5%.
• Reduction in rates will correct the inverted duty structure for fertiliser production.

Bio-Pesticides and Micronutrients

• 12 bio-pesticides and several micronutrients: GST cut from 12% to 5%.
• Bio-based inputs made more affordable, promoting eco-friendly and sustainable agriculture.
• Encourage farmers to shift from chemical pesticides to bio-pesticides, improving soil health and crop quality.
• Direct benefit to small organic farmers and FPOs under the government’s National Mission on Natural Farming.

Fruits, Vegetables and Food Processing

• Prepared/preserved vegetables, fruits, nuts: GST reduced from 12% to 5%.
• Boost to cold storage, food processing, and value addition.
• Reduction in wastage of perishables, ensuring farmers get better prices.
• Promoting export of processed food, strengthening India’s position as an agri-export hub.

Dairy Sector

• No GST on milk and cheese.
• GST on butter, ghee, etc., cut from 12% to 5%.
• Dairy farmers’ products made more competitive
• Milk cans (iron/steel/aluminum) now at 5% instead of 12%.
• Boost to indigenous dairy products.

Aquaculture

• GST on ‘prepared or preserved fish’ reduced from 12% to 5%.
• Likely to encourage aquaculture and fish farming nationwide.

Honey

• GST reduced on natural honey, benefitting beekeepers, tribal communities, and rural SHGs.
• GST on artificial honey (whether blended with natural or not) cut from 18% to 5%.

Solar-Powered Equipment

• GST on solar-powered devices reduced from 12% to 5%.
• Affordable solar equipment will lower irrigation costs, helping farmers.

Tendu Leaves

• GST reduced from 18% to 5%.
• As tendu leaves are a key source of income for farmers and tribals in Odisha, Madhya Pradesh, and Chhattisgarh, this cut will strengthen livelihoods in these states.

On the whole, the GST rationalization in agriculture is a farmer-friendly, pro-rural, and pro-sustainability reform — lowering costs for farmers, boosting cooperatives and FPOs, and strengthening food security. The boost in agriculture will happen at a multi-layered level and also to all its allied activities. The farm productivity will increase thanks to reduced fertilizer costs, the cold storage and Agri-processing will gain, and mechanization will increase in farming. In addition to all this, aqua culture, dairy farming and co-operatives involved in the same will become more profitable. The follow-on effect of the above will make us more competitive against imported food products and packaged foods. Our domestic food production would be more competitive compared to imports of food items, in order to become Atmanirbhar.

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RC/KSR/AR

GST rate reductions for agricultural inputs lower costs and expand access to mechanisation and value addition. Reduction of GST rates across agricultural and allied sectors lowers input and production costs by cutting rates on agricultural machinery and parts, fertilisers, bio-pesticides and micronutrients, solar-powered equipment, and selected processed foods; it also exempts milk and cheese and reduces rates on several dairy inputs, thereby making mechanisation more accessible to small and medium farmers, promoting eco friendly inputs, and supporting value addition, transport cost reduction, and rural livelihoods.