The items on which 5 per cent GST will be levied mostly from September 22, include ghee, condensed milk, butter, other fats and cheese, milk cans, prepared/preserved vegetables, fruits, nuts, natural honey, prepared or preserved fish, kendu
The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, has acceded to many long pending demands of the agriculture sector and reduced the Goods and Services Tax, mostly to 5 per cent, on several items including tractors, dairy products, raw materials to produce fertilizers, biopesticides and agricultural equipment. Farmer leaders, industry officials, agri tech companies, and many others have appreciated the move and hope it will help accelerate farm sector growth.
The council has also decided to completely remove the GST by bringing it to zero from 5 per cent on items such as ultra high temperature (UHT) milk and paneer.
The items on which 5 per cent GST will be levied (which are currently under 12 per cent and 18 per cent slabs), mostly from September 22, include ghee, condensed milk, butter, other fats and cheese, milk cans (made of iron, steel or aluminium), prepared/preserved vegetables, fruits, nuts, natural honey, prepared or preserved fish, kendu leaves (used in bidi making).
Other items where 5 per cent rate will be applicable are fixed speed diesel engines of power not exceeding 15HP, hand pumps, nozzles for drip irrigation equipment and sprinklers, agricultural and horticultural machinery for soil preparation, harvesting and threshing machinery, composting machines and tractors (except road tractors for semi-trailers of engine capacity more than 1800 cc).
The 5 per cent rate will also apply to self-loading agricultural trailers and hand-propelled vehicles such as hand carts, sulphuric acid, nitric acid and ammonia, 12 biopesticides such as Bacillus thuringiensis variants, Trichoderma viride, Trichoderma harzianum, Pseudomonas fluoresens, Beauveria bassiana, NPV of Helicoverpa armigera, NPV of Spodoptera litura, neem-based pesticides and Cymbopogan, all micro-nutrients covered under the Fertiliser Control Order, 1985.
Rear tractor tyres and tubes, agricultural diesel engines of cylinder capacity exceeding 250 cc for tractors, hydraulic pumps for tractors, rear wheel rim, centre housing, transmission housing, front axle support, bumpers, brake assembly, gear boxes, trans-axles, radiator assembly and cooling system parts – all used in tractor repairing – will attract 5 per cent GST from September 22.
“The boost in agriculture will happen at a multi-layered level and also in all its allied activities. The farm productivity will increase thanks to reduced fertiliser costs, the cold storage and agri processing will gain, and mechanisation will increase in farming,” a senior Agriculture Ministry official said. Besides, apiculture, dairy farming and co-operatives involved in these activities will be more profitable, the official added.
“The GST rate cut will also help India become more competitive against imported food products and packaged foods,” the official said.
Published on September 4, 2025