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Historic GST Reduction Brings Relief to Agriculture and Livelihoods

10 September 2025Vanshika verma
Historic GST Reduction Brings Relief to Agriculture and Livelihoods

Historic GST Reduction Brings Relief to Agriculture and Livelihoods

The GST Council, in its recent 56th meeting held on September 3, 2025 made the suggestions related to GST tax rate changes. These new changes set a major transformation in the agriculture and dairy sector.

With the reduction in GST rates, farmers, dairy workers and agricultural and livestock owners from all countries are showing joy and gratitude to Prime Minister Shri Narendra Modi and Union Finance Minister Nirmala Sitharaman. Union Agriculture Minister Shri Shivraj Singh Chouhan termed the new rates a revolutionary decision, expressing hope for historic changes.

The impact of GST reforms will be widely seen among small and medium farmers. Reducing GST rates on agricultural machinery and solar-powered equipment will help in slashing farming costs and will increase farmers’ profits. GST has also been reduced on biopesticides 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.

Also Read
From Ghee to Cheese: GST Council’s 56th Meet Cuts Dairy Taxes

The GST reforms will also promote integrated farming. Clear benefits will be visible in animal husbandry, beekeeping, agroforestry, fisheries and poultry farming. Reduced GST on Tendu leaves will build the livelihood of tribal communities, while lower GST on commercial goods vehicles will make the transportation of farm produce cheaper. The following are some of the things which will get cheaper:

Tractor prices, Tractor parts, Agricultural equipment, Solar-powered irrigation devices, Fertilisers, Pesticides, Fruits and vegetables, Nuts, Boost to food processing, No GST on milk and cheese, Promotion of indigenous products, GST reduced on ‘prepared/preserved fish’, Natural honey costs less. Reduced GST on tendu leaves.

Difference between Old and New GST for multiple popular agricultural machinery and equipment:-

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.)
1. Tractor 35 HP 5,80,000 69,600 6,50,000 29,000 6,09,000 41,000
2. Tractor 45 HP 6,43,000 77,160 7,20,000 32,150 6,75,000 45,000
3. Tractor 50 HP 7,59.000 91,080 8,50,000 37,950 7,97,000 53,000
4. Tractor 75 HP 8,93,000 1,07,160 10,00,000 44,650 9,37,000 63,000
5. Power Tiller 13 HP 1,69,643 20,357 1,90,000 8,482 1,78,125 11,875
6. Paddy Transplanter- 4 row walk behind 2,20,000 26,400 2,46,400 11,000 2,31,000 15,400
7. Multicrop Thresher – 4 tone/ hr capacity 2,00,000 24,000 2,24,000 10,000 2,10,000 14,000
8. Power weeder – 7.5 hp 78,500 9,420 87,920 3,925 82,425 5,495
9. Trailer 5 tone capacity 1,50,000 18,000 1,68,000 7,500 1,57,500 10,500
10. Seed Cum Fertilizer Drill – 11 tyne 46,000 5,520 51,520 2,300 48,300 3,220
11. ⁠Seed cum Fertiliser Drill – 13 Tine 62,500 7,500.00 70,000 3,125.00 65,625 4,375
12. Harvester Combine 26,78,571 3,21,428 30,00,000 1,33,928 28,12,500 1,87,500
14 feet Cutter Bar
13. Straw Reaper 3,12,500 37,500.00 3,50,000 15,625 3,28,125 21,875
5 feet
14. Super Seeder 2,41,071 28,928.57 2,70,000 12,053 2,53,125 16,875
8 Feet
15. ⁠Happy Seeder 1,51,786 18,214 1,70,000 7,589.29 1,59,375 10,625
10 Tine
16. Rotavator 1,11,607 13,392 1,25,000 5,580 1,17,187 7,812
6 Feet
17. Baler Square 13,39,286 1,60,714 15,00,000 66,964 14,06,250 93,750
6 feet
18. Mulcher 1,65,179 19,821 1,85,000 8,258 1,73,437 11,562
8 Feet
19. ⁠Pneumatic Planter 4,68,750 56,250 5,25,000 23,437 4,92,187 32,812
4 Row
20. ⁠Sprayer Tractor Mounted 1,33,929 16,071 1,50,000 6,696 1,40,625 9,375
400 Liter capacity
  • Fertilisers

Ammonia, sulphuric acid, nitric acid: Gst reduced from 18% to 5%

  • Bio-Pesticides and Micronutrients

12 bio-pesticides and several micronutrients: GST cut from 12% to 5%

  • Fruits, Vegetables and Food Processing

Prepared/preserved vegetables, fruits, and nuts: GST reduced from 12% to 5%

  • Dairy Sector

GST on butter, ghee, etc. reduced from 12% to 5%.

  • Aquaculture

GST on prepared or preserved fish reduced from 12% to 5%.

  • Honey

GST on artificial honey, whether blended with natural or not, was cut from 18% to 5%.

  • Solar-Powered Equipment

GST on solar-powered devices was reduced from 12% to 5%.

  • Tendu Leaves

GST reduced from 18% to 5%.

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