Revised GST rates get mixed response from agriculture sector

Revision of the GST rates has received mixed response from the agriculture sector.

“The GST recalibration for India’s dairy industry, moving everyday staples like paneer to the 0% slab, and ghee, butter, and cheese from 12% to 5%, will have a broad impact, as these categories touch nearly 100% of Indian households,” said Bhuvaneswari Nara, Vice-Chairperson and Managing Director, Heritage Foods.

This shift strengthens formal supply chains, builds consumer trust, and supports more nutritious diets. Dairy products such as paneer, butter, and ghee are staples in every Indian kitchen, yet rising prices have forced many families to switch to cheaper substitutes that lack similar nutritional value, she said.

According to the Chairman and Managing Director of Milky Mist Dairy, T. Sathish Kumar, both, farmers and dairy consumers will benefit from the revised rates.

According to R.G. Agarwal, Chairman Emeritus, Dhanuka Agritech Limited, the government should place all agri-inputs, including pesticides, fungicides, bio-stimulants, micronutrients, agri-equipment, and drones, in a single 5% GST slab.

Currently, while fertilizers are taxed at 5%, crop protection products are taxed at 18%. This makes crop protection more expensive. GST rationalisation will immediately bring down expenses for small and marginal farmers, who do not benefit from larger schemes of subsidies.

One 5% rate will streamline compliance, improve supply chain credit flows, and create a better platform for agri-input companies to invest in research and development. Exempting seeds from GST is a clear signal of priority to agriculture. Extending it further to other inputs that are required will offset affordability for farmers with compliance ease, he said.

The Southern India Engineering Manufacturers Association (SIEMA) said manufacturers of agricultural pumpsets were expecting GST reduction to 5% from 18%. “We urge the GST council to reconsider the GST rate on water pumps,” said Mithun Ramdas, its president.

The Indian Vegetable oil Producers’ Association (IVPA) said the government should address the inverted duty structure on edible oils. “We are extremely hopeful that the government will support the domestic industry, and the MSME ecosystem, and allow refund of the accumulated tax credits,” it said.