10 September 2025, New Delhi: 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 Mr. Narendra Modi and Union Finance Minister Smt. Nirmala Sitharaman. Union Agriculture Minister Mr. 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.
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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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