Neemuch, Sep 24 In a major relief for farmers and agricultural traders, the Central government, under the leadership of Prime Minister Narendra Modi, has significantly reduced the Goods and Services Tax (GST) on tractors from 12 per cent to 5 per cent, effective September 22. This move, part of the recently announced GST 2.0 reforms, has sparked widespread enthusiasm across rural India, including in Madhya Pradesh's Neemuch, where the impact is already visible on the ground.
Until now, buyers of new tractors had to pay 12 per cent GST, which added a substantial financial burden, particularly for small and marginal farmers. The new rate of 5 per cent is now directly saving farmers anywhere between Rs 20,000 and Rs 1,00,000 per tractor, depending on the model. Additionally, similar relief has been announced for other agricultural machinery, further aiding India’s farming community.
The timing of the GST reduction coincides with the festive season, traditionally a period of increased rural spending. Tractor showrooms in Neemuch and other agricultural regions have reported a sharp surge in customer footfall and purchases.
This decision feels like a festival of savings, said local farmers, many of whom had postponed tractor purchases while awaiting the government's GST decision.
Ashish Patidar, a farmer from Janakpur in Neemuch district, said: "We had been using an old tractor my father had purchased years ago. We were waiting to buy a new one after hearing the Prime Minister speak about a possible GST reduction on August 15. Now that the GST has been officially reduced to 5 per cent, we bought a new tractor and saved Rs 45,000. Tractors are vital to our work. We thank PM Modi for thinking about us farmers and giving us this much-needed relief."
Babulal Banjaria, a tractor dealer and District President of the Tractor Dealers’ Association, said: "I’ve been in the tractor business for 40 years, and this is one of the most commendable steps I've seen from the government. The GST reduction has sparked significant interest among farmers. Footfall has increased daily, and so have sales. This move is benefiting both farmers and traders alike. Earlier, 12 per cent GST was levied on tractors; now it’s just 5 per cent, giving farmers a direct benefit of 7 per cent."
Arjun Bairagi, a farmer from Piplon village, also shared his excitement. "Today, I bought a new tractor and received a Rs 50,000 discount thanks to the GST cut. We’ve been planning this purchase for a long time, and now, with this government support, it has finally become possible."
Dinesh Patidar, another showroom operator in Neemuch, said, "This GST reduction is a huge boost for farmers and businesses. Farmers are happy, and so are we. It’s a step in the right direction that will benefit the rural economy in the long term."
Member Banjara, a farmer from Rampuria village, said: "I bought a new tractor during Navratri, and the GST reduction saved me Rs 50,000. The tractor now costs Rs 7 lakh. I’m grateful to the Prime Minister for this relief."
This strategic tax relief is expected to have ripple effects across the rural economy.
It’s not just the farmers who are celebrating. Local markets are witnessing increased activity, which in turn benefits retailers, suppliers, and service providers linked to the agricultural sector. Traders have also praised the government for listening to their concerns and acting decisively.
Shikhar Pagaria, a tractor dealer in Neemuch, highlighted the broader benefits.
"Earlier, GST on tractors was 12 per cent, but now it’s just 5 per cent. This 7 per cent difference translates to savings between Rs 20,000 to Rs 90,000, depending on the model. Farmers are very enthusiastic. A few months ago, showroom visits had declined. Now, they’re picking up again. This move is going to boost the entire agricultural ecosystem. I truly commend the government, especially PM Modi, for providing such timely and meaningful support," he told IANS.
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