GST cuts on farm inputs a boon for farmers: Agriculture Minister

Bhopal: Union Agriculture and Rural Development Minister Shivraj Singh Chouhan on Saturday welcomed the recent GST rate cuts on agricultural inputs, calling them a significant step toward reducing farming costs and enhancing farmers’ incomes.

Speaking to the media in Bhopal, Chouhan said the decision to reduce GST on bio-pesticides and micro-nutrients will directly benefit farmers and encourage a shift toward bio-fertilisers. In the dairy sector, he added, the removal of GST on milk and cheese will support not just consumers but also farmers, cattle breeders, and milk producers.

“The reduction of GST to 5 per cent on agricultural equipment, be it tractor, harvester, rotavator, of different types, will prove to be a boon for the farmers,” the Union Minister stated.

Chouhan emphasised the government's commitment to lowering production costs and increasing output in the agriculture sector.

“The government's resolution is to reduce the cost of production in agriculture and increase production. If production increases and cost decreases, then the farmer's profit in farming will increase,” he said, as per a statement by the Ministry of Agriculture & Farmers Welfare.

He also pointed out that some companies have already begun passing on the GST reduction benefits to consumers.

GST relief for allied sectors

Highlighting the comprehensive approach of the reforms, Chouhan noted that the GST exemption extends beyond just crop farming.

“Like animal husbandry, beekeeping, fish farming, agro-forestry, sheep-goat rearing, poultry farm, if you look at the overall sector, because agriculture and animal husbandry are complementary to each other. The exemption given in GST on that will also prove to be a boon for our agriculture and farmers,” he said.

Focus on energy and water efficiency

Chouhan also lauded the GST cut on energy-based and research-driven farm equipment, with rates dropping from 12 per cent to 5 per cent.

“Research-based equipment will also benefit them. Similarly, GST has been reduced on drip irrigation etc. They will become cheaper and will be easily accessible to farmers. If farmers use them, water will also be saved, production will increase and farmers' profit will increase,” he added.

Finance Ministry’s broader GST reform

The tax relief comes in the wake of a significant simplification in the GST regime, announced earlier this week by Finance Minister Nirmala Sitharaman. As part of the "Next-Generation GST" reforms, the government has consolidated the 12 per cent and 18 per cent slabs into a dual-rate structure of 5 per cent and 18 per cent, while maintaining a 40 per cent rate for sin goods.