GoM reviewing GST on farm inputs: FM

Says existing provisions under I-TAct have gaps in addressing digital data

- MONIKA YADAV

A proposal to reduce goods and services tax (GST) on agricultural equipment and inputs is being reviewed by a Group of Ministers (GoM), Union Finance Minister Nirmala Sitharaman on Tuesday said in the Lok Sabha.

Responding to queries on the Finance Bill, 2025, Sitharaman said that a proposal to lower GST on farm inputs, including tractors, drip irrigation systems, fertilisers, and pesticides, to zero was discussed in the 45th GST Council meeting on September 17, 2021, but could not be agreed upon at the time. "Now the Group of Ministers is looking into it, so the items will be looked at by the GoM and they will take a call," she added. The Lok Sabha later passed the Finance Bill, 2025.

Sitharaman explained the GST structure for agricultural items. "Seeds attract zero GST. There is 5 per cent GST on fertilisers, agricultural implements, and manuals, manually operated or animal-driven. And hand tools attract zero GST, and tractors attract 12 per cent. Agricultural pumps too attract 12 per cent GST," she said.

She said the average GST rate had come down to 12.2 per cent from 15 per cent at the time of its introduction.