 "GST cut on farm equipment could lead to 6-7% saving, ministry data shows")
The Finance Ministry last week lowered the GST on major farm equipment from 12 per cent to 5 per cent, which is expected to lead to significant savings in production costs for farmers and also improve mechanisation.
At a press conference today, Union Agriculture Minister Shivraj Singh Chouhan released a list of items whose prices will come down due to the GST rate cut. The list showed that prices of all major farm equipment will fall by a minimum of 6–7 per cent from their existing rates (see chart).
| Name of Agricultural Machinery & Equipment | Total Cost with 12% GST | Total cost with revised GST @ 5% | Saving |
| (Rs.) | (Rs.) | (Rs.) | |
| Tractor 35 HP | 650000 | 609000 | 41000 |
| Tractor 45 HP | 720000 | 675000 | 45000 |
| Tractor 50 HP | 850000 | 797000 | 53000 |
| Tractor 75 HP | 1000000 | 937000 | 63000 |
| Power Tiller 13 HP | 190000 | 178125 | 11875 |
| Paddy Transplanter- 4 row walk behind | 246400 | 231000 | 15400 |
| Multicrop Thresher - 4 tone/ hr capacity | 224000 | 210000 | 14000 |
| Power weeder - 7.5 hp | 87920 | 82425 | 5495 |
| Trailer 5 tone capacity | 168000 | 157500 | 10500 |
| Seed Cum Fertilizer Drill - 11 tonne | 51520 | 48300 | 3220 |
| ??Seed cum Fertiliser Drill - 13 Tonne | 70000 | 65625 | 4375 |
| Harvester Combine | 3000000 | 2812500 | 187500 |
| 14 feet Cutter Bar | |||
| Straw Reaper 5 feet | 350000 | 328125 | 21875 |
| Super Seeder 8 feet | 270000 | 253125 | 16875 |
| ??Happy Seeder 10 tonne | 170000 | 159375 | 10625 |
| Rotavator 6 feet | 125000 | 117187 | 7812 |
| Baler Square 6 feet | 1500000 | 1406250 | 93750 |
| Mulcher 8 feet | 185000 | 173437 | 11562 |
| ??Pneumatic Planter 4 row | 525000 | 492187 | 32812 |
| ??Sprayer Tractor Mounted 400 Lts capacity | 150000 | 140625 | 9375 |
The new GST rates and slabs will have a wide-scale impact on the agriculture sector. This will especially benefit small and medium farmers. “Due to reduced GST rates on agricultural equipment, the cost of agriculture will decrease and farmers’ profits will increase,” Chouhan said.
The Union Ministry for Animal Husbandry, Dairying and Fisheries, meanwhile, said that rate cuts on milk and milk products will have a direct bearing on 10 crore milk farmers across India.
Meanwhile, the Federation of Seed Industry of India (FSII), in a statement welcoming the GST cut on all agriculture items, said that while seeds as a final product are exempted from GST, the industry is unable to claim the benefit of input tax credit as all critical items such as packaging, logistics, warehousing, and chemical seed treatments attract GST at standard rates. This leads to a higher effective tax burden on seeds compared to other agri-inputs that enjoy concessional rates. FSII urged that this anomaly be corrected.