GST on Milk: Complete Guide with Rates & Exemptions

Key Takeaways:
 

• UHT milk costs less now with zero GST from September 2025.
   
• You spend less money on milk every day with the new tax rules.
   
• Find your savings by times the milk price by the tax number.

The Indian government has introduced significant changes to the Goods and Services Tax (GST) structure, effective from 22nd September 2025. Under these new rules, Ultra-High Temperature (UHT) milk has been made completely exempt from GST, reducing the tax rate from 5% to nil. 

This reform is part of the next-generation GST overhaul announced by Prime Minister Modi, aimed at simplifying the tax structure and reducing the burden on essential commodities.

Meet Yash, a 25-year-old software engineer from Mumbai who regularly purchases UHT milk for his family. Before the new rules, Yash bought 2 litres of branded UHT milk daily at ₹120 per litre.

Before September 2025: ₹126 per litre (₹120 + ₹6 GST), monthly expense ₹7,560 

After September 2025: ₹120 per litre (zero GST), monthly expense ₹7,200

Yash's monthly savings: ₹360

This means Yash now saves ₹4,320 annually on UHT milk purchases alone, making essential nutrition more affordable for his household. Read more about GST on milk in this blog.

Read More - GST on Dairy Products – Updated Tax Rates & Guide

HSN Code for GST on Milk

This comprehensive classification system provides HSN codes for various dairy products to determine GST on milk and related products based on their fat content and processing methods.

Businesses and consumers use these HSN codes to identify the correct GST on milk rates for different dairy products during purchase and taxation.

Note:
 

• All HSN codes fall under Chapter Head 04: "Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included"
   
• Related 8-digit HSN codes are available for some entries (04012000, 04014000, 04015000), which help determine accurate GST on milk products
   
• Some entries show "NA" for commonly used trade descriptions, indicating no specific brand examples were provided for that particular GST on the milk category

Learn More - GST 2.0 & Mother Dairy: What Consumers Must Know About the Price Cuts

Sweet Relief: Government Slashes Milk Product Taxes

The Indian government has reduced GST on milk products significantly. This change brings relief to consumers and dairy farmers. UHT milk now has zero GST instead of 5%. Paneer and chhena are also tax-free. Butter, ghee, cheese, and condensed milk now attract 5% GST instead of 12%. Ice cream GST drops from 18% to 5%. Plant-based milk drinks now have 5% GST. These changes boost consumption during the festive season.

Dairy farmers welcome these reductions. Top milk-producing states include Uttar Pradesh, Rajasthan, and Madhya Pradesh. These states produce over half of India's milk supply. Farmers' unions want no GST on milk and essential items. Dairy companies promise to pass benefits to consumers. India produces 239 million tonnes of milk yearly. This accounts for 24% of global production. The dairy sector contributes 5.5% to India's economy. These tax cuts help families access quality milk products.

Bonus Tip: Always check the latest GST updates before bulk-buying milk products, as rates may differ by product category and packaging type.

Conclusion

The government's strategic implementation of revised GST on milk demonstrates remarkable fiscal prudence. These comprehensive reforms fundamentally transform India's dairy taxation landscape permanently. Consumers now experience substantial financial relief through reduced GST on milk products nationwide. The elimination of taxes on UHT milk exemplifies progressive policy-making excellence.

Furthermore, this GST on milk restructuring enhances agricultural sector sustainability significantly. Dairy farmers benefit from increased demand and improved market dynamics. The simplified tax framework encourages greater consumption of nutritious dairy products. Additionally, the reformed GST on the milk system strengthens India's position globally. These transformative changes establish a precedent for future essential commodity taxation. The policy demonstrates the government's commitment to citizen welfare and economic growth.

FAQs

1. Does GST on milk apply to all dairy brands equally? 

Yes, GST on milk rates apply uniformly across all brands and manufacturers.

2. When did the GST on milk rates change in India? 

GST on milk rates changed from September 22, 2025, making UHT milk tax-free.

3. Why did the government reduce GST on milk? 

The government reduced GST on milk to help consumers save money.

4. Can you get GST on milk refunds for past purchases? 

No, GST on milk refunds don't apply to purchases made before the rate changes.