The 56th meeting of the Goods and Services Tax (GST) Council, chaired by Union Finance Minister Nirmala Sitharaman, has brought wide-ranging reforms to cut costs, ease compliance, and deliver much-needed relief to India’s farmers. The two-day meeting, which commenced in the capital on September 03, 2025, focused on rationalising GST rates across essential goods and services.
With targeted cuts in farm inputs, mechanisation equipment, food processing, and rural livelihoods, the Council’s decisions are being hailed as farmer-friendly, pro-rural, and pro-sustainability reforms that will strengthen India’s food security and competitiveness.
Union Minister for Finance and Corporate Affairs Smt. @nsitharaman chairs the 56th meeting of the GST Council, in New Delhi, today.
— Ministry of Finance (@FinMinIndia) September 3, 2025
The participants included Union Minister for State for Finance Shri @mppchaudhary, Chief Ministers of Delhi, Goa, Haryana, Jammu and Kashmir,… pic.twitter.com/pqz8upYg1U
Agriculture at the Core of GST Reforms
Agriculture and allied sectors received special attention in the rationalisation drive, with tax reliefs designed to directly benefit small and marginal farmers, cooperatives, and rural households.
Farm Mechanisation Gets Cheaper
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Tractors (<1800 cc) to attract just 5% GST.
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Tractor tyres, tubes, and hydraulic pumps reduced from 18% to 5%.
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Sprinklers, drip irrigation, threshers, and diesel engines (≤15 HP) brought down from 12% to 5%.
Impact: Affordable machinery will accelerate mechanisation, reduce manual labour costs, and increase crop productivity. It also boosts access to shared equipment through cooperatives and Farmer Producer Organisations (FPOs).
Fertiliser Inputs Corrected
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GST on ammonia, sulphuric acid, and nitric acid slashed from 18% to 5%.
Impact: By correcting the inverted duty structure, fertiliser prices will stabilise, ensuring timely and affordable supply for farmers during critical sowing seasons.
Bio-Pesticides & Micronutrients Encouraged
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Twelve bio-pesticides and several micronutrients shifted from 12% to 5%.
Impact: A strong push for eco-friendly farming, soil health improvement, and support to natural farming initiatives, benefitting small organic growers and FPOs.
Food Processing & Perishables
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Prepared and preserved fruits, vegetables, and nuts to attract 5% GST instead of 12%.
Impact: Encourages cold storage, reduces post-harvest losses, strengthens food processing industries, and boosts India’s export potential.
Dairy Sector Relief
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No GST on milk and paneer.
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Butter and ghee reduced to 5% from 12%.
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Milk cans (iron, steel, aluminium) cut to 5% from 12%.
Impact: A direct boost to dairy farmers- especially women-led rural enterprises- while making essential protein and fat sources more affordable for households.
Aquaculture & Apiculture Support
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Prepared or preserved fish reduced to 5% GST.
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Natural honey brought down to 5%.
Impact: Strong support for pisciculture, beekeepers, tribal communities, and rural SHGs.
Sustainable Farming Push
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Solar-powered irrigation devices reduced from 12% to 5%.
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Kendu leaves, critical to tribal livelihoods in Odisha, Madhya Pradesh, and Chhattisgarh, slashed from 18% to 5%.
Impact: Encourages renewable energy adoption and secures income for tribal gatherers of minor forest produce.
Logistics and Supply Chain Efficiency
The Council also addressed logistics—a crucial link in the agri-economy.
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GST on commercial trucks and delivery vans reduced from 28% to 18%.
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Third-party insurance for goods carriers taxed at 5% with ITC benefits.
Impact: Cheaper freight will reduce transportation costs of agri-produce, making exports more competitive and lowering prices for consumers.
Agriculture goods such as tractors, agricultural, horticultural and forestry machines for soil preparation or cultivation, harvesting or threshing machines, including straw or fodder balers, grass or hay movers, composting machines etc. all will be taxed at a #GST rate of 5%,… pic.twitter.com/vz6AdrHwx8
— PIB India (@PIB_India) September 3, 2025
Towards Atmanirbhar Bharat
Collectively, these reforms sharpen India’s edge in domestic food production and strengthen the agri-value chain against imports. By reducing input costs, making mechanisation more accessible, and encouraging value-added processing, the GST Council has laid the foundation for a more self-reliant rural economy. For farmers, cooperatives, and agri-enterprises alike, the 56th meeting will be remembered as a turning point that linked tax policy with prosperity, sustainability, and national food security, taking the country closer to its broader vision of inclusive development and Viksit Bharat.
