Confused by varying GST rates on milk, eggs, honey & dairy? Clear it up! Explore rates, exemptions & HSN codes for hassle-free shopping.
Since June 2017, India’s GST Council has assigned clear GST rates (NIL, 5%, 12%, 18%, and 28%) linked to HSN codes to harmonize tax across the country. Wondering about milk, eggs, honey, and animal products? Chapter 4 of the HSN Code holds the key! Let’s explore GST rate for milk, dairy products, egg and honey in this guide.
GST on Dairy Products – Overview
Goods and Services Tax (GST) on dairy products can be tricky, especially with the diverse range of items and varying tax rates. But fear not, fellow dairy enthusiasts! This comprehensive blog article will equip you with all the essential knowledge to make informed purchase decisions.
GST Rates at a Glance:
- Exempt (0%): Fresh milk (including cow, buffalo, and goat), unbranded paneer, curd, and buttermilk.
- 5%: Ultra-high temperature (UHT) milk, flavored milk, lassi, packaged paneer and curd with a brand name, milk powder (except skimmed), and cream.
- 12%: Butter, ghee, cheese, condensed milk, and skimmed milk powder.
- 18%: Ice cream and dairy-based desserts.
HSN Codes:
- 0401: Milk and cream (fresh, pasteurized, UHT, etc.)
- 0402: Milk and cream (concentrated, flavored, powdered)
- 0403: Yogurt, kefir, and other fermented milk products
- 0404: Whey and other natural milk constituents
- 0405: Butter and other milk fats
- 0406: Cheese and paneer
- 0407: Eggs
Highlights
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GST Rates on Milk, Paneer, and Curd
The GST regime in India applies different rates to different dairy products, affecting both production and sale:
Exemptions (0% GST):
- Fresh milk: This includes cow, buffalo, and goat milk, as long as it’s not sweetened, flavored, or condensed.
- Unbranded paneer and curd: Loose, unbranded paneer and curd enjoy exemption from GST.
- Buttermilk: This refreshing beverage remains exempt under GST.
5% GST:
- Ultra-high temperature (UHT) milk: UHT milk undergoes a high-heat treatment for extended shelf life and falls under the 5% GST bracket.
- Flavored milk: Milk with added flavors, like chocolate or strawberry, attracts a 5% GST.
- Lassi: This popular yogurt-based drink also falls under the 5% GST category.
- Packaged paneer and curd with a brand name: Branded paneer and curd, even if loose, attract a 5% GST.
- Milk powder (except skimmed): Milk powder, except skimmed milk powder, is subject to a 5% GST.
- Cream: Whipped cream and other types of cream are taxed at 5% under GST.
12% GST:
- Butter: This delicious dairy spread attracts a 12% GST rate.
- Ghee: Clarified butter, also known as ghee, is subject to a 12% GST.
- Cheese: All types of cheese, including cheddar, mozzarella, and paneer, fall under the 12% GST category.
- Condensed milk: Sweetened condensed milk is taxed at 12% under GST.
- Skimmed milk powder: Unlike regular milk powder, skimmed milk powder attracts a 12% GST.
18% GST:
- Ice cream and dairy-based desserts: Indulge in ice cream and other dairy desserts, but remember they come with an 18% GST “happiness tax.”
Tax on Production and Sale of Milk, Paneer, and Curd under GST
The GST rate applicable to production and sale of milk, paneer, and curd depends on the specific product and its classification:
- Milk: For producers and sellers of fresh milk, no GST is levied. However, UHT milk and flavored milk production and sale attract the applicable 5% GST.
- Paneer and curd: Unbranded paneer and curd production and sale are exempt from GST. For branded paneer and curd, a 5% GST applies to both production and sale.
- Butter, ghee, cheese, etc.: These products attract a 12% GST at both production and sale stages.
Standard GST Rates With HSN Codes for Dairy Products
| HSN Code | Description | GST Rate |
| 0401 | Fresh milk and pasteurized milk | NIL |
| 0402 | Milk and cream, concentrated or containing added sugar or other sweetening matter | 5% |
| 0403 | Buttermilk, curd, lassi | NIL |
| 0404 | Whey and other natural milk constituents | 5% |
| 0405 | Butter and other milk fats | 12% |
| 0406 | Cheese and curd | 12% |
| 0407 | Eggs | NIL |
| 0408 | Honey | 5% |
Did you know?
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How to Calculate GST on Milk, Paneer, and Egg?
Calculating the GST on milk, paneer, and egg depends on two key factors:
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Product Type and Classification:
- Fresh Milk: All types of fresh milk (cow, buffalo, goat) are exempt from GST, regardless of packaging or branding.
- UHT Milk: Ultra-high temperature (UHT) milk attracts a 5% GST.
- Flavored Milk: Milk with added flavors falls under the 5% GST category.
- Lassi: This popular yogurt-based drink attracts a 5% GST.
- Loose Paneer and Curd: Unbranded and loose paneer and curd are exempt from GST.
- Packaged Paneer and Curd (Branded): Branded paneer and curd, even if loose, attract a 5% GST.
- Cheese and Butter: All types of cheese and butter are subject to a 12% GST.
- Eggs: Whether in shell, fresh, preserved, or cooked, eggs are generally exempt from GST (NIL).
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Invoice Price:
Once you know the applicable GST rate, simply multiply it by the total invoice price (MRP) of the product to calculate the GST amount.
Example 1:
- 1 liter of fresh milk (MRP Rs. 50): No GST as fresh milk is exempt.
- 1 liter of UHT milk (MRP Rs. 60): GST = 5% of Rs. 60 = Rs. 3
- 500g pack of branded paneer (MRP Rs. 80): GST = 5% of Rs. 80 = Rs. 4
Example 2:
- You buy 1 liter of UHT milk priced at Rs. 50.
- The HSN code for UHT milk is 0402 and the GST rate is 5%.
- Therefore, the GST on the milk is 50 * 5/100 = Rs. 2.50.
- The final price with GST is Rs. 50 + Rs. 2.50 = Rs. 52.50.
Amendments to Charge GST on Milk, Paneer, Egg.
The current rates remain as follows:
- Exempt (0% GST): Fresh milk (cow, buffalo, goat), unbranded paneer and curd, buttermilk, eggs.
- 5% GST: UHT milk, flavored milk, lassi, packaged paneer and curd with a brand name, milk powder (except skimmed), cream.
- 12% GST: Butter, ghee, cheese, condensed milk, skimmed milk powder.
- 18% GST: Ice cream and dairy-based desserts.
Chapter 4 Encompasses GST Rates and HSN Codes for Dairy, Eggs, Honey, and Animal-Derived Edible Products.
| HSN Code | Description | Rate (%) | CESS (%) | Effective Date | Rate Revision |
| 257 | MILK AND CREAM, NOT CONCENTRATED NOR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER | 5% | 0% | 01/07/2017 | – |
| 257 | Fresh milk and pasteurised milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk | 0% | 0% | 01/07/2017 | – |
| 1053184 | MILK AND CREAM-FAT CONTENT, BY WEIGHT, <= 1% | 5% | 0% | 01/07/2017 | – |
| … | … | … | … | … | … |
| 4049000.0 | WHEY, WHETHER OR NOT CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER; PRODUCTS CONSISTING OF NATURAL MILK CONSTITUENTS, WHETHER OR NOT CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER, NOT ELSEWHERE SPECIFIED OR INCLUDED WHEY AND MODIFI | 5% | 0% | 01/07/2017 | – |
| 261 | BUTTER AND OTHER FATS AND OILS DERIVED FROM MILK; DAIRY SPREADS | 12% | 0% | 01/07/2017 | – |
| 1069568 | BUTTER AND OTHER FATS AND OILS DERIVED FROM MILK; DAIRY SPREADS BUTTER | 12% | 0% | 01/07/2017 | – |
| … | … | … | … | … | … |
| 4100090.0 | EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED : OTHER | 5% | 0% | 01/07/2017 | – |
Conclusion
- Dairy products have varying rates depending on factors like freshness, concentration, and fat content. Some common items like fresh milk and loose paneer are exempt, while others fall under 5%, 12%, or even 18% GST.
- Birds’ eggs and natural honey are generally exempt, but processed egg products and flavored honey might attract a 5% GST.
- The GST Council regularly reviews rates and classifications, so staying updated is crucial.
If you have a specific question or concern, please feel free get in touch with Vakilsearch expert and know more
FAQ
What is the GST rate for flavored or sweetened milk and dairy beverages?
Flavored or sweetened milk and dairy beverages, including chocolate milk, strawberry milk, and lassi with added sugar, typically fall under the 5% GST bracket.
Is there a distinction in GST rates for fresh milk versus long-life or UHT (Ultra High Temperature) treated milk?
Yes, there is a difference. Fresh milk and pasteurized milk, including full-fat and skimmed varieties, are exempt from GST as long as they're not packaged or branded. However, UHT milk falls under the 5% GST category regardless of packaging or branding.
How does the GST rate for dairy products impact businesses involved in the dairy industry, including farmers and processors?
The varying GST rates impact businesses differently:
- Farmers: GST exemption for fresh milk benefits dairy farmers directly. However, processors and distributors dealing with packaged or branded milk products need to comply with the applicable GST rates.
- Processors and distributors: Higher GST rates on certain products can affect pricing and competitiveness. Additionally, complying with GST filing and regulations adds to operational costs.
Are there any specific labeling or packaging requirements related to the GST for milk and dairy products?
While there are no specific labeling requirements solely for GST purposes, packaged dairy products subject to GST must display the MRP (Maximum Retail Price) inclusive of applicable.
Are raw materials used in the production of dairy products also subject to GST, and at what rate?
The GST rate on raw materials used in dairy production depends on the specific item. For example, cattle feed might have a different GST rate than packaging materials. It's important for businesses to consult with Vakilsearch expert to determine the accurate rates for their specific inputs.
Where can businesses and consumers find the most up-to-date information on GST rates for milk and dairy products?
The official GST portal (https://www.gst.gov.in/) is the most reliable source for updated information on all GST rates, exemptions, and notifications. Additionally, industry associations and government-approved e-commerce platforms for GST compliance can provide helpful resources.
Are there any exemptions or concessions for certain categories of milk and dairy products under the GST regime?
Yes, as mentioned earlier, fresh milk and unbranded paneer and curd are exempt from GST. Additionally, milk powder for babies and certain types of whey products also benefit from exemptions or lower GST rates. It's recommended to refer to the official GST portal or consult Vakilsearch Experts for detailed information on exemptions.
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