New GST on Dairy Products: What’s Taxable Under GST
Quick Summary
- Fresh and unpackaged dairy products like milk, curd, and buttermilk are exempt from GST.
- Packaged and branded dairy items like curd, butter, and ghee are taxed at 5%.
- Cheese, including paneer, is taxed at 5% if branded, while ice cream has a 5% GST rate.
- Businesses must register for GST if their turnover exceeds ₹40 lakh and apply the correct rates to avoid penalties.
- Input Tax Credit can be claimed on GST paid for taxable dairy products, but not for exempt items.
Dairy products are a part of everyday life such as milk, cheese, butter, curd, and more. But when it comes to taxation, do all dairy items attract GST? The answer depends on the product and how it is processed or packaged. In this blog, we’ll break down the dairy products gst rate, covering everyday items sold in stores and markets across India.
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Is GST Applicable on Dairy Products?
Yes, many dairy products fall under GST, but not all. Some items like milk are exempt, while others like cheese and flavored milk are taxable. The gst for dairy products varies depending on:
- Whether the product is fresh or processed
- Whether it is sold loose or packaged
- Whether it is branded or unbranded
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New GST Rate on Dairy Products in India
Dairy products in India do not all carry the same GST rate. Basic milk items are generally exempt, while processed dairy products may attract 5% GST. After 22 Sep 2025, the GST burden on many dairy products was reduced, making the category materially different from the old 12% and 18% structure used in older content.
GST Rates on Common Dairy Products
| Dairy Product | New GST Rate (After 22 Sep 2025) |
Old GST Rate (Before 22 Sep 2025) |
|---|---|---|
| Fresh milk | 0% | 0% |
| Pasteurised milk | 0% | 0% |
| UHT milk | 0% | 5% |
| Curd, lassi, buttermilk | 0% or 5% | 0% or 5% |
| Paneer / chhena, pre-packaged and labelled | 0% | 5% |
| Butter and other dairy fats, including ghee and dairy spreads | 5% | 12% |
| Cheese | 5% | 12% |
| Condensed milk | 5% | 12% |
| Beverages containing milk / milk-based beverages | 5% | 12% |
| Ice cream | 5% | 18% |
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(After 22 Sep 2025) 0%
(Before 22 Sep 2025) 0%
(After 22 Sep 2025) 0%
(Before 22 Sep 2025) 0%
(After 22 Sep 2025) 0%
(Before 22 Sep 2025) 5%
(After 22 Sep 2025) 0% or 5%
(Before 22 Sep 2025) 0% or 5%
(After 22 Sep 2025) 0%
(Before 22 Sep 2025) 5%
(After 22 Sep 2025) 5%
(Before 22 Sep 2025) 12%
(After 22 Sep 2025) 5%
(Before 22 Sep 2025) 12%
(After 22 Sep 2025) 5%
(Before 22 Sep 2025) 12%
(After 22 Sep 2025) 5%
(Before 22 Sep 2025) 12%
(After 22 Sep 2025) 5%
(Before 22 Sep 2025) 18%
GST on Dairy Products in India: Key Highlights
- Unprocessed and unbranded dairy items are often exempt from GST.
- Processed and packaged dairy products attract GST based on how they are classified.
- Branded dairy items, even if simple like curd or butter, may attract 5% GST.
- Products like flavored milk or ice cream fall into tax brackets like 5%, as they are considered value-added or luxury items.
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GST Compliance for Dairy Businesses
- Register for GST if your turnover exceeds ₹40 lakh (₹20 lakh in some states).
- Apply the correct GST rate based on the product and packaging.
- Issue GST-compliant invoices.
- File regular GST returns.
Proper classification and invoicing help avoid penalties and keep your business GST-compliant.
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How to Calculate GST on Dairy Products
After 22 Sep 2025, many dairy products now fall under either 0% or 5% GST, depending on the item and its classification.
Example 1: Fresh milk at 0%
Suppose the taxable value of fresh milk is Rs 2,000.
GST = 2,000 × 0% = Rs 0
Final Invoice Value = Rs 2,000
Example 2: Ghee at 5%
Suppose the taxable value of ghee is Rs 10,000.
GST = 10,000 × 5% = Rs 500
Final Invoice Value = Rs 10,500
Example 3: Cheese at 5%
Suppose the taxable value of cheese is Rs 4,000.
GST = 4,000 × 5% = Rs 200
Final Invoice Value = Rs 4,200
Input Tax Credit on Dairy Products
Businesses can claim Input Tax Credit (ITC) on the GST paid for packaging, transportation, machinery, and services related to the sale of taxable dairy products.
No ITC is allowed if you’re dealing only in exempt items like unpackaged milk or curd.
Conclusion
The gst on dairy products in india ranges from 0% to 18%, depending on how the product is sold. While basic items like milk, curd, and buttermilk are often tax-free, processed and branded items like cheese, butter, ghee, and ice cream are taxed. For businesses, knowing the correct rates ensures better compliance and smoother operations.
