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Agriculture companies and dairy firms such as Dodla Dairy and Parag Milk Foods rose up to 7% on Thursday after the Goods and Services Tax (GST) Council announced steep cuts across fertilisers, farm machinery and dairy products in a move aimed at easing costs for farmers and consumers.Parag Milk Foods shares surged 7.4% to Rs 263.50. Meanwhile, the shares of Dodla Dairy climbed 4.5% to Rs 1,498.85 and Kaveri Seeds shares advanced 2.9% to Rs 1,219.45The 56th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, approved sweeping rate reductions for the agriculture and dairy sectors. The new rates will come into effect on September 22.As per the official statement, Ultra High Temperature (UHT) milk and paneer have been made completely tax-free, with GST reduced from 5% to zero. GST on condensed milk, butter, other fats and cheese was cut to 5% from 12%.On the farm side, GST on key fertiliser inputs such as sulphuric acid, nitric acid and ammonia has been slashed from 18% to 5%. Micronutrients covered under the Fertiliser Control Order, 1985, will also attract 5% GST.Machinery and equipment reliefTax rates on a range of agricultural machinery were reduced to 5% from 12%. These include fixed-speed diesel engines of power not exceeding 15 HP, hand pumps, nozzles for drip irrigation and sprinklers, machinery for soil preparation, harvesting and threshing, composting machines and tractors (excluding road tractors for semi-trailers of engine capacity over 1800 cc).The relief also extends to self-loading agricultural trailers and hand-propelled vehicles such as handcarts.GST on comprehensive tractor components, including rear tyres and tubes, hydraulic pumps, wheel rims, transmission housing, brake assemblies, gearboxes, radiators and other parts, was reduced from 18% to 5%.Biopesticides includedThe Council brought down GST from 12% to 5% on biopesticides including Bacillus thuringiensis variants, Trichoderma viride, Trichoderma harzianum, Pseudomonas fluorescens, Beauveria bassiana, NPV of Helicoverpa armigera, NPV of Spodoptera litura, neem-based pesticides and Cymbopogan.Broader tax simplificationThe rate cuts come amid a wider overhaul of the GST structure. The Council scrapped the 12% and 28% slabs to retain just the 5% and 18% slabs for most goods. Cement was also reclassified into the lower slab, aligning core industrial inputs with the broader goal of tax simplification.The GST Council said the measures reflect the government’s “next-generation GST reform” agenda, announced by Prime Minister Narendra Modi on August 15, to make the tax regime more efficient, equitable and growth-oriented.Also read | Small and mid-cap firms lag behind large caps in Q1 earnings show(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)