GST Rate Cut Has Lowered Production Cost For Farmers: Minister - KNN India

Updated: Dec 06, 2025 12:59:23pm

GST Rate Cut Has Lowered Production Cost For Farmers: Minister

New Delhi, Dec 6 (KNN) Reduction in goods and services tax (GST) has made key agricultural inputs cheaper and hence lowered production cost for farmers, said Chemicals & Fertilizers Minister Jagat Prakash Nadda in written reply to a question in Lok Sabha.

Lower GST on Fertilizer Materials
GST on sulphuric acid, nitric acid and ammonia has been cut from 18 percent  to 5 percent after GST Council's decision to rationalise rates in August this year, while micronutrients now attract 5 percent instead of 12 percent .

The minister said the move will ease manufacturers’ working-capital burden and translate into savings for farmers. 

Industry estimates show per-acre savings of Rs 140 in paddy, Rs 199 in sugarcane, Rs 446 in potato and Rs 146 in wheat for farmers.

Relief on Bio-Pesticides
GST on bio-pesticides has been reduced from 12 percent  to 5 percent , making eco-friendly crop protection more affordable. 

The government expects this to encourage wider adoption of biological products, strengthen integrated pest management and support organic and natural farming practices.

Farm Machinery Now Cheaper
GST on tractors and agricultural machinery, earlier 12–18 percent , has been lowered to 5 percent. 

Sprayers, sprinklers and drip irrigation systems also now fall under the 5 percent  slab. The minister said this will boost precision agriculture, cut wastage and promote scientific spraying practices.

Lower equipment prices, combined with 40–50 percent  subsidies under mechanisation schemes, are expected to ease farmers’ financial burden and help FPOs and cooperatives set up more Custom Hiring Centres at reduced costs. 

The reforms are also likely to strengthen domestic farm machinery manufacturers under the Atmanirbhar Bharat initiative. According to the ministry, tractor and machinery prices may fall by 7–13 percent .

Nationwide Benefits
With GST applied uniformly across India, the government said the impact, lower cultivation costs, better access to inputs and improved availability of fertilizers, will reach farmers across all categories. 

The reforms are expected to support stable fertilizer supply, increase mechanisation and promote sustainable farming practices.

(KNN Bureau)