GST slash to lower agri costs, spur mechanisation
New Delhi, Sept. 5 -- The Goods and Services Tax on most agricultural inputs - from tractors to sprinklers - now fall in the lowest rate slab of 5% from as high as 18% earlier, a move that will push down farming costs and help spur mechanisation, analysts said.
Tractors below 1,800 cc will now attract a tax rate of 5%, including components such as tyres, tubes, and hydraulic pumps, from 18% earlier. Likewise, the rate on harvest equipment, sprinklers and drip irrigation lines has been cut from 12% to 5%.
The GST regime completed eight years on July 1, 2025, and a reduction in the rates and restructuring of the slabs are expected to boost domestic consumption, helping to cushion a much-feared fall in exports in the wake of Trump's 50% tariff.
Sweeping cuts have also been made in most dairy foods and nuts. The GST on milk sterilised using ultra high temperature, a slightly different version of pasteurisation, and paneer (cottage cheese) has been cut from 5% to zero. For butter, ghee, and dairy spreads, the GST has been eased from 12% to 5%.
"Moving everyday staples like paneer to the 0% slab.will have a very broad impact. We shall be passing on the full benefits to our consumers," Bhuvaneswari Nara, managing director, Heritage Foods said....
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