GST on Dairy Products: What’s Taxable Under GST

Dairy products are a part of everyday life — 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 gst on dairy products, covering everyday items sold in stores and markets across India.

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    GST Rates

    Is GST Applicable on Dairy Products?

    Yes, many dairy products fall under GST, but not all. 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

    Some items like milk are exempt, while others like cheese and flavored milk are taxable.

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    GST Rates on Common Dairy Products

    Dairy Product GST Rate Remarks
    Fresh milk (unpackaged) 0% Fully exempt
    Pasteurized milk 0% Exempt if not in branded packaging
    Curd, lassi, buttermilk 0% Exempt if sold unbranded and unpackaged
    Branded curd/lassi 5% Taxable when sold under a brand name
    Butter 12% Packaged and branded only
    Ghee 12% Commonly used edible fat
    Cheese 12% All types (paneer, processed cheese)
    Condensed milk 18% Processed and sweetened dairy product
    Flavored/processed milk 12% or 18% Depends on ingredients and packaging
    Ice cream 18% Considered a luxury or indulgent item

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    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% to 12% GST.
    • Products like flavored milk or ice cream fall into higher tax brackets like 18%, 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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    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.

    Frequently Asked Questions (FAQs)

    • Is GST applicable on milk?
      No, fresh milk is exempt from GST. Pasteurized milk is also exempt if not sold under a brand name.
    • What is the GST on ghee and butter?
      12% GST applies when ghee and butter are sold in packaged and branded form.
    • Are curd and lassi taxable?
      Unbranded curd and lassi are exempt. Branded versions attract 5% GST.
    • What is the GST on cheese or paneer?
      Packaged and branded cheese or paneer attracts 12% GST.
    • Is ice cream taxed under GST?
      Yes, all varieties of ice cream attract 18% GST, regardless of packaging or branding.
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