New GST on Ghee: Branded vs Loose Categories
- 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.
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.
Track Ghee Batch Expiry Across All Storage and Distribution Units
Join our guided walkthrough to see how BUSY can transform your business operations.
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% |
GHEE TYPE
HSN CODE
NEW GST RATE
GHEE TYPE
HSN CODE
NEW GST RATE
GHEE TYPE
HSN CODE
NEW GST RATE
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
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% |
Ghee Type
HSN Code
GST Rate
Ghee Type
HSN Code
GST Rate
Ghee Type
HSN Code
GST Rate
Get a Free Trial – Best GST Accounting Software For Small Business
Scan Ghee Product Barcodes for Error-Free Retail Billing
* 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%.
