Govt Cuts GST On Dairy Products To Boost Rs 19 Lakh Crore Industry

The government announced on Thursday that the 56th GST Council had approved sweeping tax rationalisations on milk and milk products, aimed at boosting demand in India’s ₹19 lakh crore dairy industry.

The Ministry of Fisheries, Animal Husbandry & Dairying said in a statement that the reforms, approved on Wednesday, represent one of the most comprehensive overhauls of GST rates in the sector.

New Rates Effective From September 22, 2025

Under the revised structure, most dairy products will either be tax-exempt or attract only a 5% GST rate.

• UHT milk: reduced to nil from 5%
• Paneer/Chhena (pre-packaged and labelled): reduced to nil from 5%
• Butter, ghee, dairy spreads, cheese, condensed milk, milk-based beverages: reduced to 5% from 12%
• Ice cream: reduced to 5% from 18%
• Milk cans: reduced to 5% from 12%

The ministry said the reforms would directly benefit over 8 crore rural farmer families, especially small, marginal, and landless labourers dependent on rearing milch animals.

Lower taxes are also expected to reduce operational costs and curb adulteration in the dairy supply chain.

India’s Dairy Sector Set for Growth

India produced 239 million tonnes of milk in 2023–24, accounting for nearly 24% of global milk production. The domestic dairy market was valued at ₹18.98 lakh crore in 2024.

“These recent GST reforms will give a major boost to productivity and competitiveness in the dairy sector while ensuring sustainable livelihoods,” the ministry stated.

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