Impact of GST Rationalisation on Indian Cooperatives

The recent rationalisation of Goods and Services Tax (GST) rates in India, according to Minister Amit Shah, significantly benefits cooperatives in the dairy, food processing, agriculture, and rural sectors. With reductions from 12% to 5% or even nil in some categories, products like milk and paneer now enjoy more competitive pricing, boosting the income of dairy farmers. Lower GST rates on food products enhance demand, thereby aiding cooperatives’ revenues. Additionally, reduced taxes on agricultural inputs and equipment support lower production costs, increase market share, and allow cooperatives to pass the savings on to farmers through higher procurement prices. These changes are expected to strengthen cooperative brands, improve market access for women-led self-help groups, and increase income opportunities across states.

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