--- title: "New GST on Dairy Products 2026: 5% Rate on Milk, Ghee, Butter" description: "New GST rate on dairy products in 2026 is 5% on packaged milk, curd, paneer, ghee and all dairy. Busy makes GST compliance easy with automatic rate application." canonical: "https://busy.in/gst-rates/dairy-products/" author: "Hitesh Aggarwal" published: "2025-05-15T09:30:42.000Z" category: "GST Rates" --- - 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. # New GST on Dairy Products: What’s Taxable Under GST 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. ## 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 **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) ## **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% | Get a Free Demo – [Best Billing and Invoicing Software](https://busy.in/accounting-software/invoicing-and-gst-billing/) ## **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. **Get a Free Trial –** [**Best GST Accounting Software For Small Business**](https://busy.in/accounting-software/gst-accounting/) Live Demo Available Today ## Share Daily Dairy Sale Invoices via WhatsApp Instantly Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **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. **Explore a Free Demo of –** [**Best Inventory Management Software For Small Business**](https://busy.in/accounting-software/inventory-management/) ## **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**](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) (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. ## About the author **Hitesh Aggarwal** As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience. ## Frequently asked questions ### What is gst 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? 18% GST applies when ghee and butter are sold in packaged and branded form. ### Are curd and lassi taxable? Both branded and unbranded curd and lassi are exempt. ### What is the GST on cheese or paneer? Packaged and branded cheese or paneer attracts 5% GST. ### Is ice cream taxed under GST? Yes, all varieties of ice cream attract 5% GST, regardless of packaging or branding. ## Related articles - [New GST on Skincare Products: Rate, Branding & Retail Pricing](https://busy.in/gst-rates/skincare-products/) - [New GST on Industrial Machinery: Slabs, ITC & MSME Effect](https://busy.in/gst-rates/industrial-machinery/) - [New GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared](https://busy.in/gst-rates/restaurant-meals/) - [New GST on Kitchen Utensils: What’s Taxed and What’s Not?](https://busy.in/gst-rates/kitchen-utensils/) - [New GST on Online Education: Rate, Exemptions & EdTech Impact](https://busy.in/gst-rates/online-education/) - [New GST on Packaging Materials: Tax Implication Across Industries](https://busy.in/gst-rates/packaging-materials/) - [New GST on Digital Marketing Services: Tax Rates & Input Credit Explained](https://busy.in/gst-rates/digital-marketing-services/) - [New GST on Pesticides: Rates, Agri-Exemptions & Sector Impact](https://busy.in/gst-rates/pesticides/) - [New GST on Butter: From Dairy to Dining – What You Pay](https://busy.in/gst-rates/butter/) - [GST on Honey: Rate, Applicability & Industry Outlook](https://busy.in/gst-rates/honey/)