At its 56th meeting on September 3, 2025, GST Council announced sweeping reductions in tax rates across key sectors that directly impact farmers, cooperatives, rural enterprises, and over 10 crore dairy farmers. The reforms, part of the #NextGenGST initiative under Prime Minister Narendra Modi’s leadership, are aimed at strengthening cooperatives, boosting rural entrepreneurship, and ensuring affordable access to essential goods for millions of households.
Dairy sector received major relief, with GST on milk and paneer, both branded and unbranded, fully exempted. Tax on butter, ghee, and similar products has been cut from 12% to 5%, while GST on milk cans made of iron, steel, or aluminium has also been reduced to 5%. The government said the move would directly benefit women-led rural enterprises, self-help groups, and cooperative milk producers, while making dairy products more affordable for households and improving nutrition security.
Food processing and household items have also seen sharp cuts. GST on cheese, namkeens, butter, pasta, jams, jellies, yeasts, bhujia, fruit pulp, and juice-based drinks has been lowered to 5%. Chocolates, corn flakes, ice creams, pastries, cakes, biscuits, and coffee now attract 5% GST, down from 18%. The changes are expected to ease household budgets, stimulate demand in semi-urban and rural areas, and boost the food processing and dairy cooperative sectors.
Farmers will gain from cuts on tractors below 1,800 cc, which now attract 5% GST. Tractor parts such as tyres, tubes, and hydraulic pumps have also seen reductions, lowering costs for cooperatives and individual farmers. Fertiliser inputs like ammonia, sulphuric acid, and nitric acid will now be taxed at 5% instead of 18%, while twelve bio-pesticides and several micronutrients have also been reduced to 5%. These changes are expected to promote eco-friendly and sustainable farming practices, in line with the government’s Natural Farming Mission.
The logistics sector will also benefit, with GST on commercial trucks and delivery vans reduced from 28% to 18%, and third-party insurance for goods carriers brought down from 12% to 5% with Input Tax Credit. This is likely to lower freight rates, reduce logistics costs, and improve competitiveness in agricultural and commercial goods transportation.
According to the government, the GST cuts announced at the Council’s meeting will boost incomes for farmers, support rural enterprises, and strengthen India’s cooperative sector while making essential goods more affordable for millions of households.
