GST on packaged dairy products slashed from 12% to 5%; UHT milk and paneer brought to nil.
Move to make nutritious dairy foods more affordable and shift consumers to regulated supply chains.
Milky Mist CEO says reform will strengthen farmer incomes, organised sector, and public health.
The government’s decision to reduce Goods and Services Tax (GST) rates on a range of dairy products to 5 per cent will have wide-ranging benefits for consumers and farmers alike, according to K Rathnam, CEO of Tamil Nadu-based Milky Mist Dairy Food Ltd.
Calling the move a “catalyst for inclusive growth,” Rathnam said the revised structure would make nutritious, value-added products such as cheese, butter, ghee and paneer more affordable and accessible, while strengthening India’s formal dairy ecosystem.
“With lower GST, more consumers will transition from unregulated supply chains to safe, standardised offerings, benefiting both public health and millions of dairy farmers who form the backbone of the industry,” he said in a statement issued on Friday.
The changes are also expected to align with the country’s nutritional goals of making protein and calcium-rich foods affordable in rural and semi-urban markets. Rathnam emphasised that the gains should be reinvested into farmer training, sustainable sourcing, cold chain infrastructure, and product innovation.
Under the new tax regime announced on September 3, the GST on ultra-high temperature (UHT) milk and packaged paneer/chhena has been reduced to nil from 5 per cent, while butter, ghee, dairy spreads, cheese, condensed milk and milk-based beverages will now attract 5 per cent GST, compared to the current 12 per cent, effective September 22, 2025.
