Chapter 04 - How much is GST on essential commodities like milk?

• There is no GST (goods and services tax) on fresh milk and pasteurised milk.
• Pre-packaged and labelled milk products like paneer , curd, buttermilk, etc. are subject to GST.
• View the complete list of dairy products and the applicable tax rates on the official Central Board of Indirect Taxes and Customs website.

Goods and services tax (GST) replaced several other taxes like VAT (value added tax) and service tax among others. Bringing uniformity in the tax structure, GST eliminates the cascading effect of taxes.This tax is levied on various goods and services, like clothes, computers, labour charges, etc. In today’s blog, we focus our discussion on dairy products like milk, panner , and curd. Read on to learn the applicable GST rates and HSN (harmonised system of nomenclature) codes. Also Read: How Does GST Work in India?

Pre-packaged and labelled milk products are subject to GST. These include paneer , curd, buttermilk, etc. Besides, other dairy products like cheese, butter, ghee , and condensed milk are taxable.On the other hand, fresh milk and pasteurised milk are fully exempted under GST. Also, paneer , curd, and buttermilk sold loose will not attract any GST.

Now that we have covered the dairy products that attract GST, let’s look at the applicable GST on milk, GST on paneer , GST on curd, etc along with the respective HSN codes.Let’s check the below table which reflects the tax rates and the chapters of HSN codes. You can view the full list of dairy products and the respective GST rates on the official website of the Central Board of Indirect Taxes and Customs .

Source: https://cbic-gst.gov.in/gst-goods-services-rates.html *1 Get the applicable HSN code details at https://services.gst.gov.in/services/searchhsnsac *2 IGST (Integrated Goods and Services Tax) = CGST (Central Goods and Services Tax) + SGST (State Goods and Services Tax)

After knowing about the applicable GST rates, the next obvious question in your mind may be tax calculation.Here are a few examples to help you understand the calculation of GST on milk and GST on paneer . Taxes are calculated using a similar approach for other dairy products.

• GST on milk: Example

Let’s assume the price of UHT milk to be ₹65. As seen in the table above, the applicable rate of GST on milk in this case is 5%. The amount of GST will be ₹65*5% = ₹3.5.

• : Example paneer GST on

The above table shows the rate of GST on paneer (pre-packed and labelled) at 5%. Assuming, ₹100 as the price, the GST amount will be ₹100*5% = ₹5., and Curd Paneer Input Tax Credit on Milk,If you are a registered person, you can claim input tax credit on goods and services under the CGST (central goods and services tax) Act. These goods and services should be used in the course or furtherance of business, and you should comply with the applicable conditions.

As a responsible taxpayer, ensure to comply with the applicable GST regulations and file your returns on time. Use an online GST calculator, to know your tax liability.The CGST Act allows you the benefit of input tax credit, subject to certain conditions, which helps plan your overall business expenses effectively. To further enhance your cash flow management, you can explore a working capital loan and run your routine business operations smoothly. Also Read: Working Capital Loan: Meaning, Types, Benefits & How to Apply