The Government has rolled out GST rate rationalisation, cutting tax burdens across agriculture and dairy in Bihar. Key measures include making UHT milk and paneer GST-free, reducing ghee and butter from 12% to 5%, and slashing ice cream’s rate from 18% to 5%. These changes are expected to lower prices by 5–13%, easing working capital pressures for dairies and enhancing affordability for households. The reforms aim to support Sudha’s 9.6 lakh dairy farmers, strengthen cooperative networks, and catalyze rural value chains.
Industry Insights
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Dairy’s rural backbone: In Bihar, the dairy value chain supports nearly one million farmers through the Sudha cooperative system. GST relief across milk, paneer, ghee, and ice cream will directly improve margins and reduce cost pressures for dairy units and farmer suppliers.
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Agriculture pull-through: Beyond dairy, the rationalisation extends to fertilisers, micronutrients, machinery, and farm equipment—expected 7–13% cost savings should help mechanisation and input use among smallholders.
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Policy test case: Bihar becomes a visible case study for how tax reform can support state-level food processing and agricultural growth. If dairy and agriculture in Bihar respond strongly, it can set precedent across other states.
Source : Dairynews7x7 Sep 29th 2025 Read full story here