The central government has recently made extensive amendments in the GST rates, which will provide significant benefits to the agriculture sector, cooperatives and rural enterprises. This decision will directly benefit about 10 crore dairy farmers of the country.
Taxes on milk products have been reduced significantly. Branded and unbranded milk and cheese have been made completely tax-free. GST on butter, ghee and other milk products has been reduced from 12% to 5%. Similarly, tax on metal canisters used for transporting milk has also been reduced from 12% to 5%.
Significant relief has also been provided to the food processing sector. GST has been reduced to 5% on cheese, snacks, butter, pasta, jam, jelly, yeast, bhujia and fruit-based beverages. Tax on chocolate, corn flakes, ice cream, pastries, cakes, biscuits and coffee has also been reduced from 18% to 5%.
In the agricultural equipment sector, GST on tractors with capacity less than 1800cc and their parts has been reduced from 18% to 5%. Tax on packaging material has also been reduced to 5%, which will reduce packaging and transportation costs.
GST on raw materials used in fertilizer production such as ammonia, sulfuric acid and nitric acid has been reduced from 18% to 5%. Tax on 12 organic pesticides and micronutrients has also been reduced from 12% to 5%, which will encourage organic farming.
GST on goods vehicles has been reduced from 28% to 18% and tax on their third-party insurance has been reduced from 12% to 5%.
These reforms will not only increase the income of farmers and co-operatives but will also make essential food and dairy products available to consumers at more affordable rates.
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