Easing GST Burden in Agri & Dairy

The new Goods and Services Tax (GST) rates have brought much-needed relief to the agriculture and dairy sectors.

- Dr Milind Kokje, Chief Editor

Among the various beneficiaries of the new GST regime are the agriculture and dairy sectors. GST has been reduced on agri machinery, solar-powered equipment, biopesticides and micronutrients. Milk and cheese won't attract GST while the tax slab of butter and ghee is changed from 12 per cent to 5 per cent. Though not seen as a direct tax reduction in agriculture or dairy sector, the reduction of GST on commercial goods vehicles will help transportation of farm products and farm inputs cheaper. The same holds true for tractors and their parts. The market reacted positively to the development as the share prices of the listed agri companies and dairies grew by 7 per cent.

This relief is significant because agriculture and dairy form the backbone of rural livelihoods, nutrition and employment. Any change in their tax treatment creates a ripple effect across the economy.