Big Relief for Farmers: GST on Agricultural Machinery Reduced to 5%

In a historic step, the government has reduced the GST on agricultural machinery to 5% from 12% and 18%, making this decision a source of farmers’ empowerment and agricultural productivity. This significant GST reduction is effective from today, 22nd September, 2025, making modern farming equipment more affordable, reducing the cost burden on farmers, and promoting mechanization across the country.

 

What are the changes? 

Tractors with engine capacities of up to 1800 cc, and a wide variety of farm equipment , including ploughs, cultivators, seeders, sprayers, harvesters, and their spares including tyres and tubes, now only attract 5% GST only. Previously, they were charged at 12% or 18%, which increased their retail prices and affected the financial capacity of most farmers to afford modern farm equipment.

 

The updated tax cuts are applicable to all the Indian states and union territories without any difference, meaning that the farmers of Punjab as well as in Tamil Nadu can enjoy equal benefits in terms of lower prices. As an illustration, a 4-row paddy transplanter will now be selling at a price discounted by approximately 15,400 less, and a 13-HP power tiller will be at a reduced cost of approximately 12,000 less. The reduced tax rate has even made the cost of tractor tires, which is constantly changing by farmers, to be cheaper.

 

Price reduction official list

• A 35 HP tractor will now be cheaper by ₹41,000
• A 45 HP tractor will now be cheaper by ₹45,000
• A 50 HP tractor will now be cheaper by ₹53,000
• A 75 HP tractor will now be cheaper by ₹63,000
• Seed-cum-fertiliser drill (11 tyne): cheaper by ₹3,220
• Trailer (5-tonne capacity): cheaper by ₹10,500
• Baler square (6 ft): cheaper by ₹93,750
• Mulcher (8 ft): cheaper by ₹11,562
• Seed-cum-fertiliser drill (13 tyne): cheaper by ₹4,375
• Harvester combine cutter bar (14 ft): cheaper by ₹1,87,500
• Straw reaper (5 ft): cheaper by ₹21,875
• Power weeder (7.5 HP): cheaper by ₹5,495
• Super seeder (8 ft): cheaper by ₹16,875
• Happy seeder (10 tyne): cheaper by ₹10,625
• Rotavator (6 ft): cheaper by ₹7,812
• BPneumatic planter (4-row): cheaper by ₹32,812
• Tractor-mounted sprayer (400-litre capacity): cheaper by ₹9,375

 

Why This Matters to Farmers

By decreasing the GST of farm machinery, it will decrease the initial cost incurred to purchase and maintain farm machinery. This savings of costs motivates farmers to replace traditional and labor intensive equipment with modern machines that will enhance efficiency, save time and boost crop production. To increase the productivity of farms and to boost the incomes of farmers, which is aligned to the vision of the government of doubling the Farmers Incomes and a sustainable agricultural future, mechanization comes in.

 

The government has also encouraged manufacturers and custom hiring centres to make certain that the tax benefit is clearly transferred to farmers through reduction of rental rates as well as reduction in the functions of intermediaries.

 

Government and Industry Response 

A meeting was held with key agriculture machinery associations that the union Agriculture Minister Shri Shivraj Singh Chouhan chaired to discuss the implementation of the GST rate cuts smoothly. This step of the government is celebrated by the industry representatives who assured that they would assist in realizing maximum benefits to farmers throughout the country.

 

What does this mean for Indian Agriculture?  

The standardized 5% GST rate on farm implements will transform agricultural practices by making the advanced equipment very accessible. Such fiscal relaxation will give the small and marginal farmers the capacity to use technology and modernise, lessen reliance on manual labour, and satisfy the increasing food demand in the country more effectively.

 

As affordable tractors, harvesters, and implements become available, Indian agriculture can look forward to a healthy transformation to mechanized, profitable, and sustainable agriculture - a new dawn of prosperity in the workhorse in the Indian economy.