Bhopal, 6 September 2025 (New GST Reforms) — Union Agriculture and Rural Development Minister Shri Shivraj Singh Chouhan highlighted the positive impact of the new Goods and Services Tax (GST) rates on the agriculture sector during a press conference. The reforms, effective from 22nd September 2025, are expected to significantly lower the cost of agricultural machinery, inputs, and related products, thereby increasing farmers’ profitability, particularly benefiting small and medium farmers.
Key Reductions and Benefits
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GST on agricultural equipment (tractors, harvesters, rotavators) reduced from 12%/18% to 5%, leading to savings ranging from ₹25,000 to ₹63,000 depending on the equipment size.
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Bio-pesticides and micro-nutrients now attract a lower GST, encouraging a shift toward organic and natural farming methods.
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No GST on dairy products such as milk and cheese, benefiting milk producers, cattle breeders, and consumers through affordable pricing and increased demand.
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GST on fertilizers and their raw materials like ammonia, sulphuric acid, nitric acid cut from 18% to 5%, reducing production costs and encouraging increased use.
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Energy-based agricultural equipment, including drip irrigation and sprinklers, sees GST cut from 12% to 5%, making sustainable farming tools more accessible.
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GST reductions extend to processed fruits, vegetables, honey, and fish products, encouraging value addition and enhancing farmers’ income streams.
Impact on Rural Economy and Allied Sectors
The lower GST rates on building materials like cement and iron will reduce construction costs in rural areas, aiding housing schemes like Pradhan Mantri Awas Yojana and infrastructure development of schools, anganwadis, and panchayat offices. Women’s self-help groups engaged in handicrafts, dairy, and leather goods production are expected to benefit from reduced GST rates, driving inclusive growth.
Farmer Savings Examples
| Equipment | Previous Cost (₹) | New Cost (₹) | Estimated Savings (₹) |
|---|---|---|---|
| 35 HP Tractor | 6,50,000 | 6,09,000 | 41,000 |
| 45 HP Tractor | 7,20,000 | 6,75,000 | 45,000 |
| 50 HP Tractor | 8,50,000 | 7,97,000 | 53,000 |
| 75 HP Tractor | 10,00,000 | 9,37,000 | 63,000 |
| Power Tiller 13 HP | 20,357 | 8,482 | 11,875 |
| Multi-Crop Thresher | 24,000 | 10,000 | 14,000 |
| Paddy Planting Machine | 26,400 | 11,000 | 15,400 |
| Power Weeder 7.5 HP | 9,420 | 3,925 | 5,495 |
| Seed Cum Fertilizer Drill | 1,50,000 | 1,39,500 | 10,500 |
Government’s Vision and Commitment: New GST Rules
Shri Chouhan expressed gratitude to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for the GST reforms aimed at lowering production costs and boosting farmer incomes. He emphasized the government’s focus on integrated farming and natural agriculture, encouraging diversification into allied sectors such as animal husbandry, beekeeping, fish farming, agroforestry, and poultry.
The reforms are expected to spur demand, increase rural incomes, and strengthen the overall economy by boosting agriculture’s contribution and empowering farmers and rural women entrepreneurs.
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Source: PIB
