Agriculture has always been the backbone of India’s economy, and agricultural exports like cotton, rice, and spices play a significant role in foreign trade. With GST 2.0 in 2025, exporters must understand the tax treatment, exemptions, and refund processes applicable to agro-commodities. This guide explains the GST rules for key agricultural exports.

1. GST on Cotton Exports

• Raw Cotton: Generally attracts 5% GST in the domestic market. However, when exported, it is considered zero-rated supply under GST.
• Export Benefit: Exporters can claim Input Tax Credit (ITC) refund on inputs used in cotton production.
• Impact: Boosts India’s position as the world’s second-largest cotton exporter.

Example: A textile exporter shipping cotton bales abroad pays no GST on the exports but can claim refund on GST paid for fertilizers, pesticides, or ginning services.

2. GST on Rice Exports

• Non-Basmati Rice: Exempt from GST in domestic trade and also zero-rated for exports.
• Basmati Rice: No GST on exports, though domestic sales may attract minimal GST in value-added forms.
• Impact: Ensures Indian rice exporters remain globally competitive.

Example: Exporting 10,000 tons of basmati rice does not attract GST, but exporters can claim ITC refunds on packaging and logistics costs.

3. GST on Spices Exports

• Raw Spices: Domestic GST rates vary between 5% and 12% depending on the spice (e.g., turmeric, cardamom, pepper).
• Exports: Treated as zero-rated supplies, meaning no GST is charged.
• Refund Claim: Exporters can get a refund of GST paid on inputs such as processing, storage, or packaging.

Example: Exporting ground turmeric incurs no GST on export, but ITC can be claimed on grinding and packaging services.

4. Comparative GST Treatment of Agricultural Exports

5. Exporter Compliance in 2025

• File export details under GSTR-1 and claim ITC in GSTR-3B.
• Choose between export with IGST payment (refund later) or export under LUT (without IGST).
• Maintain proper invoices, shipping bills, and input tax records for refund claims.

Conclusion