Slashing GST on Dairy Products to Save Rs 11,400 Crore Annually

India’s dairy industry leaders have welcomed the GST Council’s decision to slash Goods and Services Tax (GST) rates on major dairy products, calling it a landmark reform that will benefit millions of farmers and consumers alike, leading to an annual savings of Rs 11400 crores. With GST on staples like paneer reduced to 0% and ghee, butter, cheese, and ice cream brought down to 5%, companies such as Amul, Mother Dairy, and Heritage Foods said the move will lower consumer prices, boost farmer incomes, and energize the organised dairy sector.

Jayen Mehta, Managing Director of Amul, said, “we will definitely increase our share of the consumers’ revenue to the producer in a much larger way, so it benefits both producers and consumers.” He said half of Amul’s turnover now falls under the zero percent GST category, while the remaining is taxed at 5%. According to Mehta, the changes in GST structure will improve farmer realisations while boosting demand. 

R S Sodhi, President of Indian Dairy Association and former MD of Amul in a statement on social media said, “We are grateful to PM Shri Narendra Modi, the FM & GST council for reducing the GST on all major dairy products. This change will benefit appx 80 million farmers & 1.45 bill consumers, leading to an annual savings of Rs 11400 crores.”

Hailing Union Government’s decision to reduce GST rates on a wider range of dairy products including paneer, cheese, ghee, butter, UHT milk, milk-based beverages, and ice creams, Manish Bandlish, Managing Director, Mother Dairy said, “This progressive step will significantly enhance affordability and accessibility of value-added dairy products for consumers across the country. This is a particularly big boost for packaged categories, which are fast-growing favourites in Indian homes and will see stronger demand momentum going forward. As one of the country’s leading dairy organizations, we remain committed to ensuring that the advantages of this reform are effectively passed on to our consumers.”

“By lowering the tax slabs, the move will encourage wider adoption of packaged, value-added dairy products, strengthen consumer preference for safe and quality offerings, and enable more families to enjoy wholesome dairy goodness at better value. At the same time, it will create stronger market opportunities for farmers and further energise the dairy industry as a whole,” he claimed.

Bhuvaneswari Nara, Vice Chairperson and Managing Director, Heritage Foods, called this a timely move. She said, "Moving everyday staples like paneer to the 0% slab, and ghee, butter, and cheese from 12% to 5%, will have a broad impact, as these categories touch nearly 100% of Indian households.

She said, “We at Heritage Foods are happy to announce that we shall be passing on the full benefits of these reforms to our consumers, helping boost the festive mood in our markets. We are also working with our partners and distributors to manage the transition smoothly and will be looking to ramp up capacity to capture the expected market expansion. We are also working closely with our distributors and retail partners to manage the transition smoothly and effectively.”