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GST Council Slashes Tax on Dairy Products, Fertiliser, Biopesticides, and Farm Equipment

Rohan 29 Views 2 min read

In a major relief for farmers and consumers, the Goods and Services Tax (GST) Council has announced sweeping tax cuts across dairy products, fertilisers, biopesticides, and agricultural equipment ahead of the festive season.

GST Council Cuts GST on Dairy Products, Fertilisers, Biopesticides & Farm Equipment

At its 56th meeting chaired by Union Finance Minister Nirmala Sitharaman, the Council approved a series of rate reductions aimed at easing input costs for farmers and making essential food items more affordable.

Among the key decisions:

  • Dairy Sector: GST on Ultra High Temperature (UHT) milk and paneer has been reduced from 5% to zero, making them completely tax-free. Condensed milk, butter, cheese, and other fats will now attract 5% GST instead of 12%.

  • Agricultural Machinery: Taxes on a wide range of equipment including diesel engines (up to 15HP), drip irrigation nozzles, sprinklers, soil preparation machines, harvesting machinery, threshers, composting machines, and tractors (except certain road tractors) have been cut from 12% to 5%. The same applies to agricultural trailers, hand carts, and related equipment.

  • Fertiliser Inputs: GST on critical inputs like sulphuric acid, nitric acid, and ammonia has been slashed from 18% to 5%.

  • Biopesticides: Products such as Bacillus thuringiensis, Trichoderma variants, Pseudomonas fluorescens, Beauveria bassiana, neem-based pesticides, and others will now be taxed at 5% instead of 12%.

  • Tractor Components: Comprehensive tractor parts—including tyres, tubes, hydraulic pumps, gearboxes, radiators, brake assemblies, and other critical components—will now attract only 5% GST, down from 18%.

The revised rates will come into effect on September 22, 2025.

Industry leaders welcomed the move. Devendra Shah, Chairman of Parag Milk Foods Ltd, said:

“The reduction in GST rates on UHT milk and paneer to nil, and cuts on ghee, butter, and cheese, will directly benefit consumers, especially in rural and semi-urban areas. This will also strengthen farmer incomes, improve cattle care, and support rural livelihoods, creating long-term growth for the dairy sector.”

Experts believe the rate cuts will not only make essential food and farm products more affordable but also boost demand, support farmers’ income stability, and contribute to rural economic growth.

Rohan
Rohan
Principal Consultant at Market Stats Insight
Rohan Patil is a seasoned Healthcare Principal Consultant at Market Stats Insight and Precedence Research, with more than 5 years of experience in market intelligence and strategic insights. Holding a BSc in Biotechnology and an MBA in Marketing, he combines scientific expertise with business acumen to deliver data-driven analysis. Rohan specializes in the medical device sector and closely tracks innovations shaping the future of healthcare. His research helps global clients identify growth opportunities, assess risks, and stay competitive in a rapidly evolving market landscape.
Rohan
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Rohan

Rohan Patil is a seasoned Healthcare Principal Consultant at Market Stats Insight and Precedence Research, with more than 5 years of experience in market intelligence and strategic insights. Holding a BSc in Biotechnology and an MBA in Marketing, he combines scientific expertise with business acumen to deliver data-driven analysis. Rohan specializes in the medical device sector and closely tracks innovations shaping the future of healthcare. His research helps global clients identify growth opportunities, assess risks, and stay competitive in a rapidly evolving market landscape.