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Big GST Relief: Massive Tax Cuts to Boost Dairy, Farming & Rural Economy
In a major move, the Government of India has slashed GST rates across key sectors-especially farming, dairy, and rural industries-bringing direct benefits to over 10 crore dairy farmers, self-help groups, FPOs, and rural cooperatives. These changes are expected to reduce household expenses, boost rural income, and support sustainable agriculture.
In a landmark decision that’s expected to significantly boost India’s rural and cooperative economy, the Central Government has announced wide-ranging GST rate cuts under the #NextGenGST reforms. These changes will directly benefit farmers, dairy cooperatives, food processors, and rural enterprises, improving both affordability and incomes across rural India.
This reform is being hailed as a game-changer for over 10 crore dairy farmers, many of whom are women-led self-help group (SHG) members and cooperative members.
Major Highlights of GST Cuts
Dairy Sector Relief:
- Milk and paneer (branded/unbranded): Now fully exempt from GST.
- Butter, ghee, etc.: GST reduced from 12% to 5%.
- Milk cans (iron, steel, aluminium): GST cut from 12% to 5%.
👉Impact: Dairy products become more affordable for households while raising incomes of rural dairy cooperatives. Women-led milk processing groups stand to gain the most.
Food Processing Boost
GST reduced to 5% on:
- Cheese, butter, namkeens, pasta
- Jams, jellies, bhujia, fruit juice-based drinks
- Yeasts and other common food items
Even popular products like chocolates, biscuits, cakes, pastries, cornflakes, ice cream, and coffee are now taxed at just 5% (down from 18%).
👉Impact: Makes household food expenses lighter, especially in semi-urban and rural areas. Expected to boost demand and support the food processing industry, including cooperatives and small-scale units.
Farmers & Cooperatives Get Big Boost
- Tractors below 1800cc: GST reduced to 5%.
- Tractor parts (tyres, hydraulic pumps, tubes, etc.): Slashed from 18% to 5%.
- Fertiliser inputs (ammonia, sulphuric acid, nitric acid): GST down from 18% to 5%.
- Bio-pesticides & micronutrients: GST cut from 12% to 5%.
👉Impact: Cheaper tractors and farming inputs will lower farming costs, prevent input price hikes, and promote natural, sustainable farming. Big win for organic farmers and FPOs (Farmer Producer Organisations).
Transport Sector Relief
- Commercial vehicles (trucks, vans): GST down from 28% to 18%.
- Third-party insurance for goods vehicles: Reduced to 5% with ITC.
- Packaging items (crates, cases, packing paper): Now at 5%.
👉Impact: Lowers transportation costs, reduces freight rates, and makes it easier for rural producers and cooperatives to send goods across the country.
Why It Matters:
These reforms are not just about tax cuts-they aim to build a stronger rural economy, empower cooperatives, and make Indian agricultural and dairy products more competitive. The move also supports the Government’s focus on Natural Farming, Nutrition Security, and Atmanirbhar Bharat.
Leaders in the dairy sector, including top cooperative brand AMUL, have praised these changes.
(source-pib)
#GSTReform#DairySector#RuralEconomy
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