Most fresh, unprocessed farm produce is exempt (Nil) from GST, and seeds for sowing are Nil-rated. Fertilizers are 5%. Under GST 2.0 (effective 22 September 2025) tractors, farm machinery, drip/sprinkler systems, solar pumps and hand tools were cut from 12% to 5%, and tractor parts from 18% to 5%. Chemical pesticides remain at 18%. A pure farmer needs no GST registration whatever the turnover.
GST Rate on Agricultural Products & Inputs
The current GST rate for every common farm item, reflecting the GST 2.0 two-slab structure. Rates on tractors, machinery and irrigation were reduced to 5% from 22 September 2025.
| Item | GST Rate | Notes |
|---|---|---|
| Fresh fruits & vegetables (loose) | Nil | Unprocessed, not frozen/canned |
| Unbranded / loose cereals, pulses | Nil | Not in a branded unit container |
| Branded packaged rice / wheat / pulses | 5% | Pre-packaged & labelled unit container |
| Fresh milk, eggs, unbranded honey | Nil | In natural, unprocessed state |
| Seeds for sowing | Nil | Notification 2/2017-CT(R) |
| Fertilizers (urea, DAP, NPK, MOP) | 5% | Feedstock inputs cut 18%→5% under GST 2.0 |
| Micronutrients & bio-pesticides | 5% | Cut Reduced by GST 2.0 |
| Chemical pesticides / herbicides / fungicides | 18% | Unchanged — highest farm-input rate |
| Tractors (engine ≤ 1800cc) | 5% | Cut Reduced by GST 2.0 |
| Tractor tyres, tubes & parts | 5% | Cut Reduced by GST 2.0 |
| Farm machinery (harvesters, threshers, balers) | 5% | Cut Reduced by GST 2.0 |
| Hand tools (spades, sickles, forks) | 5% | Cut Reduced by GST 2.0 |
| Drip / sprinkler irrigation systems | 5% | Cut Reduced by GST 2.0 |
| Solar pumps for agriculture | 5% | Cut Reduced by GST 2.0 |
| Organic manure | 5% | — |
| Animal feed (cattle / poultry / aquatic) | 5% | HSN Ch.23 unified at 5% under GST 2.0 |
Rates reflect the GST 2.0 structure effective 22 September 2025. Always confirm the current rate and HSN on the official GST portal before invoicing.
GST 2.0 — What Got Cheaper for Farmers
The GST 2.0 rationalisation moved a large basket of farm equipment and inputs into the lowest 5% slab. The biggest winners were tractors, machinery and irrigation hardware that previously sat at 12%, and tractor parts that sat at 18%.
Stays exempt — no GST
- Fresh fruits, vegetables & loose grain
- Seeds for sowing
- Fresh milk, eggs & unbranded honey
- Direct sale of produce by a farmer
- Most core agricultural services
Cut to 5% under GST 2.0
- Tractors (≤1800cc) — was 12%
- Harvesters, threshers, balers, mowers — was 12%
- Tractor tyres, tubes & parts — was 18%
- Drip & sprinkler irrigation — was 12%
- Solar pumps, hand tools, micronutrients — was 12%
A lower GST on capital equipment directly lowers the sticker price of tractors and irrigation kit for farmers — industry estimates put tractor price cuts at roughly ₹40,000–₹63,000 depending on horsepower. It also fixes the inverted-duty problem for fertilizer makers, whose raw inputs fell from 18% to 5%.
Selling tractors, machinery or agri-inputs? Get your HSN classification and new rates confirmed.
Talk to a GST Expert →GST-Exempt Agricultural Services
Several services around farming are specifically exempt to protect the food supply chain and reduce post-harvest losses.
| Service | GST Status |
|---|---|
| Warehousing / storage of agricultural produce | Exempt |
| Custom hiring of farm machinery (tractors, harvesters) | Exempt |
| Services by Agriculture Produce Market Committee (APMC) | Exempt |
| Loading, unloading, packing of agricultural produce | Exempt |
| Road transport of agricultural produce by GTA | Exempt |
| Agricultural extension & cultivation-support services | Exempt |
| Supply of farm labour | Exempt |
| Greenhouse / poly-house construction (works contract) | 18% |
| Cold-store / warehousing of processed food | 18% |
Storage and transport exemptions apply to unprocessed agricultural produce; once produce is substantially processed the exemption can fall away.
The storage, transport and APMC exemptions cover produce in its natural state. Milling, polishing, branding or otherwise value-adding can convert an exempt supply into a taxable one — a common classification error for agri-processors and FPOs.
When Does a Farmer Need GST Registration?
A person cultivating land and selling their own produce is not required to register under GST, whatever the turnover — cultivation of plants and rearing of livestock are outside the definition of a taxable supply. Registration is triggered only by non-agricultural activity.
- 1Pure farmerSells own produce — no registration
- 2Adds processingRuns a flour/rice mill or brands goods
- 3Crosses ₹20LNon-agri turnover over threshold
- 4Must registerGSTIN & returns become mandatory
✓No GST registration needed if
- You only cultivate and sell your own produce
- Income is purely from primary agricultural activity
- You supply loose, unbranded, unprocessed goods
- You only hire out your machinery to fellow farmers
!Registration becomes mandatory if
- You run a flour / rice mill or processing unit over ₹20L
- You sell branded / packaged produce in a unit container
- You sell through an e-commerce operator (any turnover)
- You provide paid non-exempt warehousing or other services
The threshold is ₹20 lakh aggregate turnover in most states (₹10 lakh in special-category states). Only the non-agricultural turnover counts towards it — pure produce sales are ignored.
Run a mill, FPO or agri-trading business alongside farming?
Check if You Must Register →GST on Processed & Branded Farm Products
The dividing line is natural state vs value-added. The moment produce is processed, branded or pre-packaged in a labelled unit container, GST usually applies.
| Product | GST Rate | Notes |
|---|---|---|
| Branded packaged flour (atta, maida, besan) | 5% | Loose / unbranded is Nil |
| Edible oils | 5% | — |
| Sugar | 5% | — |
| Tea & coffee (not instant) | 5% | Instant coffee is higher |
| Fruit & vegetable juices | 18% | Confirm current HSN rate |
| Pickles, chutneys, sauces | 18% | Confirm current HSN rate |
| Namkeen / packaged snacks | 5% | Post-GST 2.0 — was 12% |
| Ghee, butter, cheese | 5% | Dairy value-add |
Processed-food rates shifted under GST 2.0 — confirm the exact rate and HSN on the GST portal before invoicing.
For agri-processors, correct HSN classification is where the money and the risk sit. The same commodity can be Nil (loose) or 5% (branded/packaged), and a wrong classification triggers demand notices. Map every SKU to its HSN before you invoice.
- Rates & notifications: gst.gov.in
- CBIC rate finder: cbic-gst.gov.in
- GST 2.0 agri rate cuts: PIB — New GST rates for agriculture (Sep 2025)
- Seed & produce exemptions: Notification 2/2017-CT(R)
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position or speak to our CA team before you act on it.