GST cut for dairy, farm inputs to benefit 10 Cr farmers

The recent Goods and Service Tax (GST) rate cuts across dairy products, agricultural inputs, and food processing items will directly benefit over 10 crore dairy farmers and strengthen the cooperative sector, the Ministry of Cooperation said on Saturday, September 6.

The restructuring also addresses the inverted duty structure in fertiliser manufacturing, helping prevent price hikes for farmers while ensuring timely availability of inputs during sowing seasons, the ministry noted in a statement.

For dairy farmers, exemptions on milk and paneer, along with reduced GST on processing equipment, are expected to improve margins for both individuals and cooperatives. Major dairy brands, including Amul, have welcomed the announcement.

Lower prices of tractors and components will particularly aid small farmers engaged in mixed farming and animal husbandry, as these vehicles are widely used for fodder cultivation and transporting farm produce.

The ministry said the measures are designed to stimulate demand in semi-urban and rural areas, reduce household spending on essential food items, and give a fillip to the food processing sector.

Reduced GST on commercial vehicles is also expected to cut logistics costs, improving export competitiveness and lowering freight rates across the supply chain.

The reform aligns with the government’s natural farming mission by making bio-pesticides more affordable than chemical alternatives, encouraging sustainable agricultural practices.

According to the ministry, these GST cuts represent one of the most comprehensive sectoral reforms for the agricultural and cooperative ecosystem, with potential cascading benefits for rural entrepreneurship and food security.