GST reforms 2025 shift focus to cooperatives, rural economy and farmer incomes

Hyderabad: The Centre’s GST reforms 2025 mark a clear policy shift to direct tax relief toward rural India and cooperatives. By cutting rates on dairy, farm machinery, fertiliser inputs, bio-pesticides, packaged foods, and logistics, the government aims to reduce costs for farmers and stimulate demand in smaller markets.

Dairy farmers gained directly. Milk and paneer are exempt, while ghee and butter now attract 5% GST. Milk cans also moved to the 5% slab. These changes ease consumer prices and strengthen cooperatives and women-led self-help groups.

GST reforms 2025 designed to boost competitiveness of farm and food cooperatives

The government also slashed GST on tractors, tyres, pumps, and spares to 5%, making farm mechanisation more affordable. Fertiliser inputs like ammonia and nitric acid dropped from 18% to 5%, lowering production costs and fixing inverted duty structures. Bio-pesticides and micronutrients at 5% support eco-friendly cultivation.

For the food industry, items such as chocolates, biscuits, cornflakes, jams, and fruit drinks now attract 5% GST. This lowers household budgets and drives rural demand. Packaging materials and crates also moved to 5%, cutting logistics costs.

Commercial transport vehicles now fall under the 18% slab, while insurance for goods carriers dropped to 5%. Both measures reduce freight rates and strengthen farm supply chains.

Analysts say these reforms offer relief for households and farmers. They also argue the measures aim to make cooperatives globally competitive. The alignment of tax policy with natural farming, logistics efficiency, and rural entrepreneurship shows a broader structural strategy.