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The GST Council has reduced tax rates on multiple dairy products, fertilisers, biopesticides, and farm equipment to benefit farmers and consumers. UHT milk and paneer are now tax-free, while butter, cheese, and condensed milk attract 5 per cent GST. Agricultural machinery, tractor components, fertiliser inputs, and various biopesticides have also seen significant tax cuts. These measures aim to lower input costs, increase demand for farm produce, and make dairy and agricultural products more affordable. The changes are expected to boost rural incomes and improve the livelihood of farmers.
The Goods and Services Tax (GST) Council has announced significant reductions in tax rates on several dairy products, fertilisers, biopesticides, and agricultural equipment, offering relief to farmers and consumers ahead of the festive season. The 56th meeting of the council, chaired by Union Finance Minister Nirmala Sitharaman, approved these measures to support both agriculture and dairy sectors. Advertisement
Ultra High Temperature (UHT) milk and paneer will now be completely tax-free, as GST has been cut from 5 per cent to zero. Condensed milk, butter, other fats, and cheese will see their GST reduced from 12 per cent to 5 per cent. Various agricultural machinery, including fixed-speed diesel engines of up to 15HP, hand pumps, drip irrigation nozzles, sprinklers, soil preparation tools, harvesting and threshing equipment, composting machines, and tractors (excluding road tractors for semi-trailers above 1800 cc engine capacity) will now attract 5 per cent GST instead of 12 per cent.
The reduced rate also applies to self-loading agricultural trailers and hand-propelled vehicles like hand carts. Fertiliser inputs such as sulphuric acid, nitric acid, and ammonia have had their GST cut from 18 per cent to 5 per cent. Similarly, several biopesticides, including Bacillus thuringiensis variants, Trichoderma viride, Trichoderma harzianum, Pseudomonas fluoresens, Beauveria bassiana, neem-based pesticides, NPV of Helicoverpa armigera, NPV of Spodoptera litura, and Cymbopogan will now attract 5 per cent GST, down from 12 per cent.
Micro-nutrients regulated under the Fertiliser Control Order, 1985, will also see a GST reduction to 5 per cent. Tractor components such as rear tractor tyres and tubes, diesel engines above 250 cc, hydraulic pumps, rear wheel rims, centre and transmission housings, front axle supports, bumpers, brake assemblies, gearboxes, trans-axles, radiator assemblies, and cooling system parts will now attract GST at 5 per cent instead of 18 per cent.
These changes are expected to lower input costs for farmers and make essential dairy products more affordable for consumers. The new GST rates are set to take effect from September 22.
Devendra Shah, Chairman of Parag Milk Foods Ltd., stated that reducing GST on UHT milk and paneer to zero and cutting it on dairy products like ghee, butter, and cheese from 12 per cent to 5 per cent is a major step for the food and FMCG sectors. He highlighted that this move will make these everyday products more affordable, especially in price-sensitive rural and semi-urban areas, while also benefiting farmers by boosting demand, income stability, and confidence in better cattle care and feed. Shah emphasized that over time, these changes can uplift rural livelihoods, strengthen the economy, and ensure the growth of the organised dairy sector directly improves the quality of life for India's dairy farming families.
Source PTI
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