Tractor makers rally as GST cut boosts farm sentiment

Tractor and farm machinery stocks gained on Thursday after the GST Council slashed tax rates on key agri equipment to make mechanisation more affordable for farmers.

Mahindra & Mahindra soared 6.06% and Escorts Kubota surged 5.46% following the announcement.

The Council reduced GST on tractors (except road tractors for semi-trailers above 1800cc) to 5% from 12%. For road tractors with engines above 1800cc, the tax was lowered to 18% from 28%. Additionally, GST on tractor tyres and parts was slashed from 18% to 5%.

The move is expected to lower ownership costs at a time when farmers are battling higher input expenses. The cut will particularly benefit small and marginal farmers, boosting rural demand and driving growth in farm mechanisation.

 

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