How Will the GST Rate Cuts Impact Agriculture & Dairy Sectors?

New Delhi, Sep 9 (NationPress) The recent decrease in GST (Goods and Services Tax) rates has emerged as a significant advantage for the agriculture and dairy industries, promising substantial improvements for small and medium farmers, as stated by the Union Ministry of Agriculture on Tuesday.

Reduced GST on agricultural machinery and solar-powered tools will lower farming expenses and boost farmers’ earnings. The tax has also been lowered on bio-pesticides and micronutrients, which will aid farmers and promote a transition from chemical fertilizers to bio-fertilizers.

With the removal of GST on milk and cheese, and a decrease in the tax rate for butter and ghee from 12 percent to 5 percent, prices for these items will drop, thereby enhancing demand and fostering growth in the dairy sector, benefiting both farmers and livestock holders. These GST reforms are expected to support integrated farming practices. Notable advantages will be seen in animal husbandry, beekeeping, fisheries, agroforestry, and poultry farming, as per the statement.

The GST reduction on tendu leaves from 12 percent to 5 percent will bolster the livelihoods of tribal communities, while the lowered GST on commercial vehicles will make transporting agricultural products less expensive, the report noted.

The GST on tractors (below 1800 cc) and their parts has been cut to 5 percent, resulting in lower tractor prices which will facilitate mechanization for small and medium farmers, saving time, lowering labor costs, and enhancing productivity. Additionally, the drop in prices for tractor parts will lessen maintenance expenses for farmers, as highlighted in the statement.

A reduction in GST from 18 percent to 5 percent on ammonia, sulphuric acid, and nitric acid will rectify the inverted duty structure for fertilizer manufacturing, helping to reduce input costs for farmers.

Similarly, the GST cut from 12 percent to 5 percent on 12 bio-pesticides and various micronutrients will make these inputs more economical, fostering eco-friendly and sustainable farming. This will also motivate farmers to switch from chemical pesticides to bio-pesticides, enhancing soil health and crop quality.

The GST on 'prepared or preserved fish' has been lowered from 12 percent to 5 percent, promoting aquaculture and fish farming across the country.

Moreover, the decrease in GST on preserved vegetables, fruits, and nuts from 12 percent to 5 percent will invigorate cold storage, food processing, and value addition. This will also lead to a reduction in the wastage of perishable goods, ensuring farmers receive better prices, the statement concluded.