Farmers, industrialists a happy lot after 7% GST reduction on farm implements

The reduction of GST from 12 per cent to 5 per cent has brought a major relief for farmers and agricultural implement manufacturers. It was a long-awaited relief, implemented from September 22, which is expected to give a boost to both farming community and agri-machinery industry.

Even the farmers, who were waiting for the reduction, are yet to purchase stubble management implements in anticipation of the tax cut. As per the farmers they will now purchase the implements to avail the benefits of 50 per cent subsidy scheme on crop residue management (CRM) machinery.

As per the records, 3,615 farmers—including 131 Scheduled Caste (SC) farmers—applied for the CRM machinery under the subsidy programme of the Agriculture and Farmers Welfare Department. Four primary types of machinery are covered: the super seeder for in-situ crop management, and slasher, hay rake, and balers for ex-situ management.

The department has already approved applications of SC farmers. Besides, it has identified 1,010 others for subsidy. Of these, 850 farmers have submitted documents to claim benefits. However, many were waiting for the GST reduction before making purchases.

“We have been waiting for the reduction of GST on stubble management implements. Now the government has reduced it and we will purchase implements and further apply for subsidy,” said Aman, a farmer.

Another farmer, Vikas, said, “Due to high taxation, we were reluctant to buy these implements. Now, we can go ahead and apply under the subsidy scheme.”

Dr Wazir Singh, Deputy Director, Agriculture (DDA), confirmed that claims for the subsidy will be processed after the implements are purchased. “Farmers were waiting for this reduction in GST. The reduction will encourage them to purchase stubble management machinery, which will help reduce farm fires,” Singh said.

Industrialists also welcomed the move. Ravi Beri, managing director of Beri Udyog Pvt. Ltd. and vice-president of the Karnal Agricultural Implement Manufacturers Association (KAIMA), said, “The GST cut will boost the industry as well as benefit the farmers. It will also increase the demand of implements.”

Som Sachdeva, adviser of KAIMA, called the decision a “long pending demand” fulfilled by the government, though he said that further relief was needed. “We are still waiting for GST on trailer parts to be reduced from 18 per cent to 5 per cent, which would lower costs and bring more benefits to the community,” he said.

Karnal district alone has 5.60 lakh acres of cultivable land, including 4.25 lakh acres under paddy. The paddy crop produces nearly 8.5 lakh MT of straw annually—3 lakh MT from basmati and 5.5 lakh MT from non-basmati varieties. The authorities have set ambitious targets to manage this residue: 2 lakh MT through in-situ methods, 5.5 lakh MT through ex-situ methods, and 1 lakh MT as fodder. An additional 1 lakh MT is slated for delivery to IOCL, Panipat, for energy production.