Big relief to farmers - huge reduction in GST on tractors, agricultural equipment and inputs
New Delhi, September 4, 2025 - Giving a big gift to the farmers, the government has drastically reduced the GST (Goods and Services Tax) rates on many products related to the agriculture sector. This decision taken in the 56th GST Council meeting will make tractors, agricultural machinery, fertilizers, solar pumps, drip irrigation equipment, dairy products, honey, and forest products like tendu leaves cheaper. These new rates will come into effect from September 22, 2025.
What will be cheaper for farmers?
Tractors and parts - GST on tractors smaller than 1800 cc and their parts (tires, tubes, hydraulic pumps) has been reduced from 18% and 12% to 5%. This will provide cheap tractors to small and marginal farmers, which will promote mechanization in farming.
Irrigation equipment - GST on solar pumps, sprinklers and drip irrigation equipment has been reduced from 12% to 5%. This will save water and encourage modern farming.
Fertilizers and organic farming - GST on raw materials of fertilizers (ammonia, sulfuric acid) and bio-pesticides has been reduced from 18% and 12% to 5%. This will benefit farmers doing organic farming.
Dairy and food products - GST on milk and cheese has been completely abolished, while butter and ghee will now be taxed at 5% instead of 12%. GST on processed fruits, vegetables and nuts has also been reduced from 12% to 5%.
Fish and honey - GST on processed fish and natural honey has been reduced from 12% to 5%, which will benefit fisheries and beekeepers.
Tendu leaves - GST on tendu leaves, an important part of the livelihood of tribals, has been reduced from 18% to 5%.
Transportation cost - Due to reduction in GST on freight vehicles, transportation of agricultural products will become cheaper.
How will farmers benefit?
These cuts will reduce the cost of farmers and increase the demand for their products. Cheap equipment and machinery will promote modernization in farming, which will benefit small farmers in particular. Also, cheap inputs and processing will reduce the prices of food products, which will also provide relief to consumers.
Boost agricultural exports
According to the Ministry of Agriculture, this move will make domestic products more competitive against imports. Investment in food processing and cold storage will increase, which will reduce the loss of fruits and vegetables and increase exports.
Farmer organizations welcomed
Farmer organizations and cooperatives have welcomed this decision. They say that this move will make farming more profitable, especially for small and marginal farmers, who are part of 86% of India's farming community.
This move of the government will not only help in increasing the income of farmers, but will also strengthen the rural economy. Cheap machinery and inputs will make farming easier, and promote organic farming.
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