--- title: "New GST on Ghee 2026: 5% Rate on Desi Ghee, Butter & Dairy Spreads" description: "New GST rate on ghee in 2026 is 5% on desi ghee, cow ghee, buffalo ghee and packaged dairy spreads. Busy helps you apply the right GST rate on every invoice." canonical: "https://busy.in/gst-rates/ghee/" author: "Rithesh Bajoriya" published: "2025-05-16T04:54:56.000Z" category: "GST Rates" --- - The GST rate on ghee in India is 5% from 22 September 2025 for products covered under the applicable HSN classification. - Ghee does not have a separate GST rate based only on whether it is branded or loose. The applicable rate depends on the product classification. - The HSN code for ghee and other milk-derived fats is 0405. - Businesses should use the correct HSN code and GST rate while issuing invoices. - Input Tax Credit availability depends on applicable GST provisions and eligibility conditions. # New GST on Ghee: Branded vs Loose Categories Ghee is a staple in Indian households, used in cooking, religious rituals, and Ayurvedic medicine. But when it comes to pricing and taxation, many are unsure about the GST impact. Whether you’re a buyer or a dairy business, understanding the **gst on ghee** helps with pricing and compliance. # **New GST Rate on Ghee in India** The revised GST rate on ghee is applicable from 22 September 2025. The GST rate for ghee is: - **5%** (applicable for ghee covered under HSN 0405) There is no separate GST exemption for loose or unbranded ghee. Ghee, whether sold in packs or by weight, attracts the applicable GST rate based on its classification. | GHEE TYPE | HSN CODE | NEW GST RATE | | --- | --- | --- | | Branded ghee (any pack size) | 0405 | **5%** | | Loose/desi ghee sold by weight | 0405 | **5%** | | Ghee sold by dairies/co-ops | 0405 | **5%** | Note: The GST rate on ghee was rationalised from the earlier applicable rate to 5% from 22 September 2025. ## What is Ghee? Ghee, also known as clarified butter, is made by simmering butter to remove water and milk solids. It is: - Used in daily cooking and sweets - Sold in branded jars, loose tins, or bulk packs - Offered by both local dairies and large FMCG brands **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) ## Old GST Rate on Ghee ### (Old GST Rates – Applicable Until 21st September) The **gst rate on ghee** is: - **12%** (uniform for both branded and unbranded products) Yes, you read that right—there is no GST exemption for loose or unbranded ghee. All ghee, whether sold in small sachets or large tins, is taxed at a flat 12% GST rate. | Ghee Type | HSN Code | GST Rate | | --- | --- | --- | | Branded ghee (any pack size) | 0405 | 12% | | Loose/desi ghee sold by weight | 0405 | 12% | | Ghee sold by dairies/co-ops | 0405 | 12% | **Get a Free Trial –** [**Best GST Accounting Software For Small Business**](https://busy.in/accounting-software/gst-accounting/) Live Demo Available Today ## Scan Ghee Product Barcodes for Error-Free Retail Billing Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **GST on Desi Ghee** Desi ghee, whether made from cow milk or buffalo milk, is taxable under GST as per its applicable HSN classification. - GST on desi ghee is **5%**. - There is no separate GST exemption or special rate based on animal source or traditional preparation methods. - Even hand-churned or farm-produced ghee covered under the applicable classification attracts the same GST rate. ## **Ghee Sellers: GST Compliance Tips** - GST registration is mandatory if annual turnover exceeds ₹40 lakhs (₹20 lakhs for services, subject to applicable conditions). - Mention the correct ghee HSN code on invoices as per product classification. - Charge **5% GST** on applicable ghee sales. - File monthly or quarterly returns as per your GST category. - Claim Input Tax Credit on eligible expenses as per applicable GST provisions. ## **GST Impact on Ghee Pricing** Since **ghee attracts 5% GST**, the final price includes this tax, especially for consumers buying packaged goods. For businesses, eligible Input Tax Credit (ITC) can help reduce net tax liability. - Base price: ₹100 - GST @5%: ₹5 - Total: ₹105 Businesses may claim eligible ITC if the ghee is used for taxable business purposes, subject to applicable GST provisions. ## **Conclusion** Knowing how GST on ghee is calculated helps both buyers and sellers stay tax-compliant. Whether you are buying branded packets or selling loose ghee, the applicable GST rate depends on the product classification. For ghee covered under HSN 0405, the GST rate is 5%. ## About the author **Rithesh Bajoriya** As a Chartered Accountant with over 18 years of experience, I have honed my skills in the field and developed a genuine passion for writing. I specialize in crafting insightful content on topics such as GST, income tax, audits, and accounts payable. By focusing on delivering information that is both engaging and informative, my aim is to share valuable insights that resonate with readers. ## Frequently asked questions ### What is the GST rate on ghee in India? The GST rate on ghee is **5%** for products covered under HSN 0405, regardless of packaging or brand. ### Is desi ghee exempt from GST? No. Desi ghee is not exempt from GST. Ghee covered under HSN 0405 attracts **5% GST**, same as other ghee products covered under the same classification. ### What is the HSN code for ghee under GST? The HSN code is **0405**, which includes butter and ghee. ### Can small dairies selling loose ghee avoid GST? Small dairies may not need GST registration if their turnover is below the applicable GST registration threshold. If registration is required, they must charge and pay **5% GST** on applicable ghee sales. ### Can businesses claim ITC on ghee purchases? Yes, if the ghee is purchased for resale or business use, ITC can be claimed on the GST paid. ## 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/)