Pune: Changes in GST rates for milk products came as a relief not only for consumers but also for dairy farmers, who said that the reduction and exemption of taxes on these products would boost consumption. It will also help in promoting products like paneer, packaged milk treated at ultra high temperature, and sweets, ahead of the festive season. The central govt, while announcing the rate revision for GST, stated that all dairy milk, other than UHT milk, was already exempt from GST. Hence, UHT milk has been exempted “to provide the same tax treatment to similar goods”. Plant-based milk drinks, except soya milk drinks, attracted 18% GST, while soya milk drinks attracted 12% GST. They have now been reduced to 5%.The reduction will help farmers in big states, including Maharashtra, which ranks fifth in terms of milk generation. The top five milk-producing states are Uttar Pradesh (16.21%), Rajasthan (14.51%), Madhya Pradesh (8.91%), Gujarat (7.65%), and Maharashtra (6.71%). They together contribute 53.99% of total milk production in the country, according to the data of the animal husbandry department.Raju Shetty of Swabhimani Shetkari Sanghatana, a farmers’ union, said that the govt should make sure that there is no GST on essential items irrespective of how they are sold. “The GST can be used not only for revenue generation but also indirectly for quality control and reducing adulteration. Pure, tested, and properly packed food is promoted through GST by keeping less charge. There should be no GST on all other essential foods, especially pulses or grains, if they are sold through proper packing,” he said.Nikhil Chitale, managing partner, Chitale Dairy, said that milk and dairy products are among the most essential components of a nutritious diet, and the reduction in GST is a welcome sign. “The reduction in GST on these products will help ease the monthly expense burden on consumers, enabling more families to access high-quality, packaged milk and dairy products. Over the past few years, consumer preference for such products has steadily increased, and this tax cut will certainly drive demand even further. We remain committed to ensuring that these advantages are passed on to consumers, making trusted, high-quality dairy products more widely accessible than ever before,” he said.He said that in India, milk production is closely tied to agriculture as a supplementary livelihood, and these reforms will contribute to increased farmer incomes while giving consumers access to the best-branded products. Additionally, GST reductions on the equipment and machinery used in this industry will further strengthen the foundation for a robust supply chain.The output of milk in our country was 239 million tonnes in 2023–24, which accounted for about 24% of global milk production. As the single largest agricultural commodity, dairy contributes 5.5% to the national economy. Milk and milk products make up the largest share of value in the livestock sub-sector, with the value of milk output reaching ₹12.21 lakh crores at current prices in 2023–24. The overall market size of the Indian dairy sector was estimated at Rs18.98 lakh crores in 2024. “The dairy industry is not only the cornerstone of the agricultural economy but also plays a vital role in ensuring food security, enhancing rural livelihoods, and generating employment for millions,” a statement issued by the Press Information Bureau said.**GST changes in milk and related products**– Ultra-high temperature (UHT) milk – GST reduced from 5% to Nil– Paneer / chhena (pre-packaged and labelled) – GST reduced from 5% to Nil– Butter, ghee, and dairy spreads – GST reduced from 12% to 5%– Cheese – GST reduced from 12% to 5%– Condensed milk – GST reduced from 12% to 5%– Beverages containing milk – GST reduced from 12% to 5% -Ice cream – GST reduced from 18% to 5%– Milk cans – GST reduced from 12% to 5%
