A rate cut on several dairy products, fertilisers, bio-pesticides, and agricultural equipment by the GST Council in its latest Goods and Services Tax reforms is being widely seen as a farmer-friendly move that will boost the country’s agrarian economy.
The 56th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, on Wednesday approved massive rate cuts for the agriculture and dairy sectors, with Ultra High Temperature (UHT) milk and paneer becoming completely tax-free, while the GST on condensed milk, butter, other fats and cheese has been reduced to 5 per cent from 12 per cent.
Agricultural machinery, like tractors (except road tractors for semi-trailers of engine capacity more than 1800 cc) and machines used for soil preparation, cultivation, threshing, and irrigation, have also been placed in the 5 per cent tax bracket. Others, like fixed speed diesel engines of power not exceeding 15HP, hand pumps, nozzles for drip irrigation equipment and sprinklers will too be taxed at 5 per cent from the previous 12 per cent.
The new rates, expected to be effective from September 22, will bring a huge relief to the farming community which has been battered with humungous crop loss because of the deluge of torrential rain and flooding.
Also Read: New GST regime from Sept 22: 5pc, 18pc continue; 40pc on luxury
While the Council seems to have placed special focus on agriculture, it also reduced rates on fertilisers and bio-pesticides, which are pre-requisites for farming, and which India imports in large amounts.
Self-loading agricultural trailers, hand-propelled vehicles like hand carts, and key fertiliser inputs, including sulphuric acid, nitric acid and ammonia, have also been reduced from 18 per cent to 5 per cent.
Meanwhile, various biopesticides including Bacillus thuringiensis variants, Trichoderma viride, Trichoderma harzianum, Pseudomonas fluoresens, Beauveria bassiana, NPV of Helicoverpa armigera, NPV of Spodoptera litura, neem-based pesticides and Cymbopogan have also seen a reduction in GST from 12 per cent to 5 per cent.
GST has been reduced to 5 per cent on micro-nutrients covered under the Fertiliser Control Order, 1985.
The decisions are expected to reduce input costs for farmers and make essential dairy products more affordable for consumers.
The council also reduced GST to 5 per cent from 18 per cent on comprehensive tractor components including rear tractor tyres and tubes, agricultural diesel engines of cylinder capacity exceeding 250 cc for tractors, hydraulic pumps for tractors, and various tractor parts such as rear wheel rim, centre housing, transmission housing, front axle support, bumpers, brake assembly, gear boxes, trans-axles, radiator assembly and cooling system parts.
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