--- title: "New GST on Milk 2026: 0% / 5% Rate on Milk, Packed Milk & Dairy" description: "New GST rate on milk in 2026 is 0% on fresh loose milk and 5% on packaged and branded milk. Busy makes GST compliance easy with automatic rate application." canonical: "https://busy.in/gst-rates/milk/" author: "Hitesh Aggarwal" published: "2025-04-30T07:29:40.000Z" category: "GST Rates" --- - Fresh, unbranded, and unflavored milk is exempt from GST, with a 0% tax rate. - Flavored, condensed, and powdered milk are taxed at 5% under the new GST rates. - Each milk category has a specific HSN code for proper classification and tax filing. - Dairy products like butter, cheese, and ice cream have a 5% GST rate, while packed paneer is exempt. - Businesses can claim Input Tax Credit on taxable milk products but not on exempt fresh milk. # New GST on Milk in India: Tax Rates, Exemptions, and Input Credit Milk is one of the most essential items in every Indian household. But how does taxation affect this everyday product under the Goods and Services Tax (GST) system? In this blog, we’ll break down the GST on milk, including what’s exempt, what’s taxable, applicable HSN codes, and how businesses can deal with [**Input Tax Credit (ITC)**](https://busy.in/gst/input-tax-credit/) . ## Is Milk Taxable Under GST? The answer depends on the **type of milk** being sold. Under GST: ## New GST Rate on Milk in India The Government of India is updating GST rates effective after **22 Sep 2025**. Below are the **expected new GST rates** for milk and related products (no compensation cess). ## New GST Rate on Milk | Milk Type | New GST Rate | Taxable? | | --- | --- | --- | | Fresh milk (unbranded, unflavored) | 0% | No | | Flavored milk | 5% | Yes | | Condensed or powdered milk | 5% | Yes | ## Old GST Rate on Milk ### (Old GST Rates – Applicable Until 21st September) | Milk Type | New GST Rate | Taxable? | | --- | --- | --- | | Fresh milk (unbranded, unflavored) | 0% | No | | Flavored milk | 5% | Yes | | Condensed or powdered milk | 5% | Yes | This makes fresh milk an **exempted good**, while **value-added milk products** fall under different GST slabs. **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) ## HSN Code for Milk and Milk Products Each category of milk is assigned an HSN (Harmonized System of Nomenclature) code for proper classification under GST. | Milk Category | HSN Code | GST Rate | | --- | --- | --- | | Milk (fresh, unflavored) | 0401 | 0% | | Flavored/processed milk | 0402 / 2202 | 12% | | Milk powder / condensed milk | 0402 | 5% / 12% | Businesses dealing in milk must use these codes for correct invoicing and tax filing. **Get a Free Demo –** [**Best Billing and Invoicing Software**](https://busy.in/accounting-software/invoicing-and-gst-billing/) Live Demo Available Today ## Record All Daily Milk Sales in Your Cash Book Instantly Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## New GST Rate on Milk-Based Products? Here’s a snapshot of New GST rates on related dairy products: | Product | New GST Rate | | --- | --- | | Butter, cheese, curd | 5% | | Paneer (packed) | 0% | | Ice cream | 5% | | Milkshakes | 5% | Only **plain milk** remains exempt—everything else is subject to GST depending on processing, packaging, and branding. ## Old GST Rate on Milk Products | Product | GST Rate | | --- | --- | | Butter, cheese, curd | 5% | | Paneer (packed) | 0% | | Ice cream | 5% | | Milkshakes | 5% | Only **plain milk** remains exempt—everything else is subject to GST depending on processing, packaging, and branding. **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) ## Input Tax Credit (ITC) for Dairy Businesses If you’re a manufacturer or supplier dealing with taxable milk products (like **flavored milk** or **milk powder**), you can [**claim Input Tax Credit (ITC)**](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) on: - Packing materials - Transport and distribution - Machinery used for processing However, **ITC is not available** for businesses dealing only in **exempt milk (0% GST)**. ## Key Points for Retailers & Suppliers - **GST on milk** applies **only to processed, flavored, or condensed milk**, not fresh unprocessed milk. - Always issue invoices with correct [**HSN codes**](https://busy.in/hsn/) . - Track your input and output taxes carefully if you’re dealing in both **exempt** and **taxable** milk products. **Explore a Free Demo of –** [**Best Inventory Management Software For Small Business**](https://busy.in/accounting-software/inventory-management/) ## Final Thoughts While milk is a basic necessity, not all forms of it are exempt from GST. The **gst on milk** in India is **0% for fresh milk**, but **flavored, powdered**, and **condensed** forms are taxed. For dairy businesses, understanding these differences is crucial for tax compliance and pricing. Always refer to the correct HSN code and GST slab when billing or filing returns. ## 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 ### Is fresh milk exempt from GST in India? Yes, fresh, unflavored, and unbranded milk attracts **0% GST**. ### What is the GST rate on flavored milk? **12% GST** is applicable under HSN 2202 or 0402. ### Is condensed milk taxable under GST? Yes. It is taxed at **5% or 12%** depending on how it's processed and packaged. ### Can dairy businesses claim ITC on milk production? Only if they deal with **taxable milk products**. If they sell only fresh milk (0%), ITC is not allowed. ### Does milk sold in tetra packs attract GST? Yes. Most flavored or long-life milk sold in tetra packs falls under **12% GST**. ## 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/)