New GST on Ghee: Branded vs Loose Categories
- The gst on ghee in india is generally 5% from 22 September 2025 for products covered under the applicable HSN classification.
- Ghee does not have a different GST rate merely because it is branded or loose.
- The applicable GST rate depends on the product classification and applicable HSN provisions.
- Ghee is generally classified under HSN 0405 (Butter and other fats and oils derived from milk). Businesses should verify the correct ghee hsn code and gst rate before invoicing.
- Businesses should mention 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.
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New GST Rate on Ghee in India
The revised GST rates on ghee applicable from 22 September 2025 are provided below.
| Ghee Type | HSN Code | New GST Rate (After 22 Sep 2025) | Old GST Rate (Before 22 Sep 2025) |
|---|---|---|---|
| Branded ghee (any pack size) | 0405 | 5% | 12% |
| Loose/desi ghee sold by weight | 0405 | 5% | 12% |
| Ghee sold by dairies/co-ops | 0405 | 5% | 12% |
Ghee Type
HSN Code
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Ghee Type
HSN Code
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Ghee Type
HSN Code
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Note: The GST rate on ghee was reduced from 12% to 5% from 22 September 2025 under the revised GST structure. The same rate applies to ghee covered under the applicable HSN classification, irrespective of whether it is branded or loose.
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
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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%.
