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GST on tractor purchases came down from 12% to 5%, starting September 22, 2025, confirmed straight from the Press Information Bureau. This covers agricultural tractors under 1800cc, and tractor tyres and parts got the same treatment too, dropping from 18% down to 5%.
Buying a tractor for farming, or running a business around agricultural machinery? You'll want to know exactly where GST on tractor purchases stands right now. This one's for farmers, dealers, and anyone in India pricing out a tractor purchase, covering the current tax rate, the HSN code that applies, and what this recent GST reform actually saves you. We'll get into the new rate, the classification, tyre and parts pricing, and what qualifies for the lower bracket.
5%, as of September 22, 2025. That's down from 12% before.
This shift came out of the GST Council's 2025 reform package, which trimmed India's GST structure down to mostly 2 slabs, 5% and 18%. Tractors under 1800cc, the kind used for actual farming, now sit squarely in that 5% bracket. Both 2-wheel drive and 4-wheel drive farming models fall under this, which covers pretty much every agricultural tractor sold across India.
This falls under Chapter 87, which covers vehicles other than railway or tramway rolling stock. For actual GST invoicing though, businesses work with the full 8-digit tariff code, not just the 4-digit heading, since there are separate variants for pedestrian-controlled tractors, road tractors for semi-trailers, and a few other types based on engine size and use. The rate can shift a bit depending on which exact 8-digit code applies and what the tractor's actually being used for, so it's worth checking your specific variant against the latest CBIC notification before putting anything on an invoice.
Also 5% now, down from 18% before.
The official PIB release on this reform specifically covers tractor tyres and parts here, bringing them down to match the rate on the tractors themselves. Before this change, replacement parts and tyres actually cost more in tax than the tractor itself did, which never quite made sense. This closes that gap, and it means keeping an existing tractor running costs less now too, not just buying a new one.
Anywhere from ₹41,000 on a 35 HP tractor to ₹63,000 on a 75 HP one, scaling with the tractor's price, straight from PIB's own numbers.
These numbers come directly from PIB's own comparison document on how this reform hits agricultural machinery.
Not a full exemption, no, but honestly, dropping to 5% from 12% and 18% across tractors, parts, and tyres is relief enough on its own.
A few other things riding on this same reduced rate:
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This isn't just about tractors either. The government's clearly trying to make mechanisation cheaper across the board for small and medium farmers.
Suresh is a farmer from Nashik who wishes to buy a 45 HP tractor costing him ₹6,43,000 excluding tax. Previously, at 12% GST, Suresh would have had to pay ₹7,20,000 for the same. Since the GST rate has now been reduced to 5%, Suresh's bill comes to ₹6,75,000, and hence he will save ₹45,000 just by purchasing this one tractor. And as the tractor ages and requires new tyres or parts in the future, he continues to pay 5% GST rather than 18%.
GST on tractor purchases sits at 5% now, a real drop from the earlier 12%, and it's been this way since September 22, 2025. Tyres and parts saw an even bigger cut, from 18% straight down to that same 5% bracket. Whether you're buying new or just keeping an old tractor running, this reform genuinely lowers what you're paying, both upfront and over time.
Dropping GST on tractor purchases to 5% is honestly one of the bigger tax breaks Indian farmers have seen in a while, cutting costs both on the purchase itself and on keeping it running afterward. Before you buy, it's worth confirming your specific tractor's HSN code and rate with your dealer or a tax professional, since the exact classification can shift a bit. But for most standard agricultural tractors, this reform puts real money, tens of thousands of rupees, back in farmers' pockets.
5%, since September 22, 2025. It used to be 12%.
12%, for standard agricultural tractors under 1800cc.
8701, covering tractors other than those under heading 8709.
5% now, down from 18%.
It covers agricultural tractors under 1800cc. Bigger or commercial ones might fall under a different classification altogether.
Somewhere between ₹41,000 and ₹63,000 depending on the tractor's size, based on PIB's own figures.
Yes, parts moved from 18% down to 5%, right alongside the tyres.
The exact date is September 22, 2025 where new rate kicks in.
Plenty else got covered: sprinklers, drip irrigation, harvesters, threshers- all moved to the 5% bracket.
The GST Council, confirmed through official PIB releases.
