GST on Agriculture — Rates, Exemptions & Farm Inputs in India (2026)

Many agricultural products are exempt from GST in India, but not all. Fresh, unprocessed produce is largely exempt. Specifically, fresh fruits and vegetables (other than frozen or processed), unprocessed cereals and pulses in unpackaged form, fresh eggs, fresh milk, and unbranded natural honey are exempt from GST. However, the moment produce is processed, branded, or packaged in a unit container, GST typically applies. For example, fresh rice in loose form sold by a farmer is exempt, but packaged branded rice sold by a company attracts 5% GST. Similarly, fresh ginger and turmeric are exempt but dried, powdered spices attract GST. The key distinction is between agricultural produce in its natural state (exempt) versus processed/value-added food products (taxable). Farmers selling produce below the ₹20 lakh turnover threshold for non-agricultural income do not need GST registration. Agricultural income from produce sold directly by farmers is not subject to GST, irrespective of turnover, as it is a primary agricultural activity.

Agricultural inputs attract varying GST rates designed to minimise the cost burden on farmers. Fertilizers (including urea, DAP, complex fertilizers, MOP) attract 5% GST — one of the lowest rates, reflecting their importance for food security. Pesticides and insecticides (including herbicides and fungicides) attract 18% GST, which has been a point of contention among farmer groups. Seeds used for sowing are completely exempt from GST (Nil rate), recognising them as a basic agricultural necessity. Irrigation equipment such as drip irrigation systems and sprinkler systems attract 12% GST. Agricultural implements and machinery: tractors with engine capacity below 1800cc attract 12% GST; hand tools, spades, shovels, and rakes used in farming attract 12% GST. Pumps used in agriculture (including solar pumps) attract 12% GST. Bamboo for use in agriculture: Nil. Organic manure: 5% GST. Bio-fertilizers and bio-pesticides: 5% GST. Crop protection chemicals above certain concentrations may attract 18%. Post-harvest equipment used by farmers may also qualify for concessional rates.

A pure farmer who cultivates land and sells agricultural produce is generally not required to register under GST, regardless of turnover. Agricultural activities — cultivation of plants, rearing of livestock for food, milk, eggs, forestry, fishing, and related primary activities — are treated as primary agricultural activities and are not taxable supplies under GST. However, if a farmer also undertakes non-agricultural activities (such as operating a flour mill, processing produce, running a food stall, or providing warehouse services to others), the turnover from those non-agricultural activities is counted for GST registration threshold purposes. The normal threshold is ₹20 lakh per annum for services and goods in most states (₹10 lakh for special category states). If non-agricultural turnover exceeds this threshold, GST registration becomes mandatory. Note that the sale of agricultural land, nursery plants for food production, and services of fishermen are also outside GST. Farmers providing services to other farmers (like custom hiring of tractors) that are agricultural extension services remain exempt.

Storage and warehousing services for agricultural produce are exempt from GST. This is explicitly provided under the GST exemption notifications to protect the food supply chain and reduce post-harvest losses. The exemption covers storage in cold storage facilities, warehouses, godowns, and silos for agricultural commodities including foodgrains, pulses, fruits, vegetables, jaggery, cotton, copra, and similar produce. The Agriculture Produce Market Committee (APMC) and other such regulated markets providing services to farmers and commission agents are also exempt from GST. Custom hiring of agricultural machinery — where a farmer hires tractors, harvesters, threshers, or other farm equipment from a custom hiring centre — is exempt from GST. However, storage of non-agricultural goods, processed food products, or goods that have been substantially altered from their natural state may not qualify for the exemption. Refrigerated transport of agricultural produce is a grey area — while refrigerated trucks are not per se exempt, the service of transporting agricultural produce by road is exempt from GST when done by a goods transport agency.

Processed and branded food products have varying GST rates based on their category and packaging. Branded and packaged food grains (rice, wheat, barley) in a unit container attract 5% GST, while the same products in unbranded or loose form are exempt. Packaged or branded pulses and flours (atta, maida, besan) attract 5% GST. Edible oils attract 5% GST. Sugar attracts 5% GST. Tea (black, green, other processed) attracts 5% GST. Coffee (other than instant) attracts 5%. Instant coffee attracts 12%. Fruit juices and vegetable juices attract 12% GST. Pickles, chutneys, and sauces attract 12% GST. Biscuits attract 18% GST regardless of price. Ready-to-eat food items (snacks, namkeen) typically attract 12-18% GST. Milk-based products: fresh milk exempt; cheese, butter, ghee attract 12% GST; ice cream attracts 18%. Animal feed (cattle feed, poultry feed) in their raw form attracts 0-5% GST, while processed or mixed animal feed may attract up to 12%. The distinction between exempt raw produce and taxable processed goods is critical for agri-businesses to understand for compliance.