Agri, textiles and crafts

GST invoice format for tractor hire and custom hiring centres

Tractor owners and custom hiring centres that rent tractors, harvesters and implements to farmers supply a nil-rated support service: renting or leasing of agro machinery, and agricultural operations such as ploughing, harvesting and threshing, fall within entry 24 of Notification 11/2017. Hire for non-farm work, such as hauling bricks or construction material, is taxable. The bill should show machine, operation, acres or hours, rate per acre or hour, village and crop, and separate any diesel or operator charges agreed.

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Sample tractor and farm machinery hire service invoice

Description	HSN/SAC	Qty	Rate (₹)	Taxable (₹)	GST
Ploughing with tractor and cultivator (agricultural operation), per acre	998619	12 ACR	1,200.00	14,400.00	0%
Combine harvester hire for wheat harvesting, per acre	998619	20 ACR	2,200.00	44,000.00	0%
Rotavator hire with tractor, per hour	998619	8 HRS	900.00	7,200.00	0%
Tractor-trolley hire for hauling bricks (non-agricultural), per trip	997319	6 NOS	1,500.00	9,000.00	5%
Taxable value				₹74,600.00
GST (CGST + SGST, or IGST if inter-state)				₹450.00
Invoice total				₹75,050.00

Sample prices are illustrative. Check the GST rate for your exact item or service before billing.

Extra fields a tractor and farm machinery hire service invoice needs

Operation and crop: Ploughing, rotavation, sowing, spraying, harvesting and threshing are charged differently. Writing the operation and crop on the bill shows that the hire was for agricultural work, which is what makes it nil-rated.
Acres, hours or quantity: Hire is charged per acre, per hour or per quintal threshed. Recording the measure lets the farmer verify the bill and helps the centre track machine use, fuel consumption and operator productivity across the season.
Machine and registration number: The tractor or harvester used, with its registration or serial number, links the job to the machine's log book and fuel records, and helps settle complaints about poor work.
Village and survey number: For custom hiring centres run under government schemes, village and field details support reports on area covered and subsidy utilisation.
Operator and diesel terms: Some hires include operator and diesel; others are dry hire. Stating the terms avoids disputes and keeps the value of the service clear.
Non-farm hire marker: Tractors are also hired for transport and construction. Marking such jobs separately keeps the taxable portion of turnover visible.

Standard GST invoice fields

Rule 46 of the CGST Rules applies to every tax invoice, including this one:

Supplier name, address and GSTIN
Consecutive invoice number (max 16 characters, unique for the year)
Date of issue
Customer name, address and GSTIN (if registered)
Place of supply with state name
HSN/SAC code per item
Description, quantity and unit
Taxable value after discounts
GST rate and CGST + SGST or IGST amounts
Signature or digital signature

GST rules that matter for a tractor and farm machinery hire service

Agro machinery hire is nil-rated

Entry 24 of Notification 11/2017-Central Tax (Rate) under heading 9986 defines support services to agriculture to include agricultural operations directly related to production of agricultural produce, including cultivation, harvesting, threshing and plant protection, and renting or leasing of agro machinery or vacant land with or without a structure incidental to its use. Such services are taxed at nil. A tractor owner ploughing a farmer's field or a centre renting a harvester for the wheat season therefore issues a bill of supply, or need not register at all if it has no other taxable supplies.

Non-farm hire is taxable

When the same tractor is hired for hauling bricks, sand or construction material, or for work at a factory site, the service is not related to agricultural production. Leasing or rental of goods with or without operator, not covered elsewhere, is taxed at the same rate as applies to supply of like goods involving transfer of title, under entry 17 of Notification 11/2017. Because tractors are now at 5%, the rental of a tractor for such work generally attracts 5%, while a goods transport arrangement with consignment notes may instead be a GTA service. The bill should describe the job accurately.

Registration for mixed operators

An operator with only farm hire income makes exempt supplies and need not register. Once non-farm hire grows and aggregate turnover crosses the threshold, registration is required and tax is charged only on the taxable lines. Input tax credit on the tractor, tyres and repairs then has to be split in proportion to taxable and exempt hire, so clean records of each job are essential.

Custom hiring centres under schemes

Farm machinery banks and custom hiring centres set up with government support often run on fixed rate cards. Their bills should show the rate card reference, the farmer's details and the operation, because the department monitoring the scheme uses them to verify area covered. The GST position is the same as for any private operator: farm operations are nil-rated. Where a centre also sells spare parts or diesel to farmers, those goods sales are separate taxable supplies and need their own invoice lines.

Common billing mistakes

Charging GST on ploughing or harvesting hire for farmers, which is a nil-rated support service.
Treating brick or sand haulage by tractor as exempt farm hire.
Not recording the operation and crop, making it hard to show that the service was agricultural.
Mixing diesel reimbursements with hire charges without stating the terms.
Claiming full input tax credit on the tractor when most income is exempt farm hire.

Tractor and farm machinery hire service GST invoice: FAQ

Is GST charged on tractor hire for farming?

No. Renting agro machinery and agricultural operations such as ploughing and harvesting are nil-rated support services under entry 24 of Notification 11/2017-Central Tax (Rate).

What SAC applies to farm machinery hire?

Support services to agriculture fall under heading 9986; SAC 998619 covers other support services to crop production. The nil rate depends on the service being for agricultural production.

Is tractor hire for construction taxable?

Yes. Rental of a tractor for non-agricultural work is a taxable rental service, generally at the rate applicable to the tractor itself.

Does a custom hiring centre need GST registration?

Not if all income is from nil-rated farm services. Registration is needed if taxable non-farm hire pushes aggregate turnover above the threshold.

Can harvester owners from another state work without registering?

Farm hire is nil-rated, so a harvester operator with only such income makes exempt supplies. Operators should still carry bills of supply and machine documents when moving between states.

Sources: GST Council: Notification 11/2017-Central Tax (Rate), updated services rate table · Gazette of India: Notification 9/2025-Central Tax (Rate), goods rate schedules

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