New GST rates on fertilizers (Raw Material - Sulphuric Acid,
Nitric Acid, Ammonia), bio-pesticides, and micronutrients
The 56th GST Council
Meeting, held at Sushma Swaraj Bhavan, New Delhi under the
chairpersonship of Union Finance Minister Smt. Nirmala Sitharaman,
brought significant relief to the fertilizer sector. The Council recommended
major GST rate cuts on fertilizers, bio-pesticides, and micronutrients,
with the aim of reducing input costs for farmers and ensuring affordable access
to agricultural essentials.
These decisions are
expected to benefit farmers, the common man, and the aspirational middle
class by lowering agricultural production costs and supporting food
security.
GST Rate
Change (From 18% to 5%)
The GST Council, in its
56th meeting, recommended a major relief for the fertilizer industry by
reducing the tax rate from 18% to 5% on key raw materials used in
fertilizer manufacturing.
Products Covered under
Rate Reduction:
|
S.
No.
|
Chapter
/ Heading / Sub-heading / Tariff item
|
Description
of Goods
|
GST
Rate (Old → New)
|
|
1
|
2807
|
Sulphuric
acid
|
18%
→ 5%
|
|
2
|
2808
|
Nitric
acid
|
18%
→ 5%
|
|
3
|
2814
|
Ammonia
|
18%
→ 5%
|
GST Rate
Change (From 12% to 5%)
The GST Council has
provided further relief to the agriculture sector by reducing GST from 12%
to 5% on important growth regulators, bio-pesticides, and micronutrients.
Products Covered under
Rate Reduction:
|
S.
No.
|
Chapter
/ Heading / Sub-heading / Tariff item
|
Description
of Goods
|
GST
Rate (Old → New)
|
|
1
|
29
or 380893
|
Gibberellic
acid
|
12%
→ 5%
|
|
2
|
3808
|
Bio-pesticides,
namely:
1. Bacillus thuringiensis var. israelensis
2. Bacillus thuringiensis var. kurstaki
3. Bacillus thuringiensis var. galleriae
4. Bacillus sphaericus
5. Trichoderma viride
6. Trichoderma harzianum
7. Pseudomonas fluorescens
8. Beauveria bassiana
9. NPV of Helicoverpa armigera
10. NPV of Spodoptera litura
11. Neem-based pesticides
12. Cymbopogan
|
12%
→ 5%
|
|
3
|
28
or 38
|
Micronutrients
covered under Serial No. 1(g), Schedule 1, Part (A) of the Fertilizer
Control Order, 1985, manufactured by registered manufacturers under FCO,
1985
|
12%
→ 5%
|
Note: The
changes in GST rates of all goods except pan masala, gutkha, cigarettes,
chewing tobacco products like zarda, unmanufactured tobacco and bidi, will be
implemented with effect from 22nd September 2025.
Expected
Impact
1. For
Farmers: Reduced cost of fertilizers and plant nutrients,
lowering overall cultivation expenses.
2. For
Fertilizer Industry: Boost to domestic manufacturers by
lowering tax burden on key raw materials.
3. For
Economy: Support to agriculture sector growth and alignment
with “Atmanirbhar Bharat” vision.
4. For
Environment: Promotion of bio-based and
eco-friendly pesticides over chemical alternatives.
Conclusion
The GST Council’s
decision to rationalize tax rates in the fertilizer sector marks a farmer-friendly
reform. By reducing GST on critical inputs from 18%/12% to 5%, the
Council has addressed a long-pending demand of both fertilizer manufacturers
and the agricultural community.
This step is likely to reduce
the price of fertilizers, encourage sustainable farming practices, and
strengthen India’s agricultural economy.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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