Discover the revised GST rates and HSN codes for dairy products like milk, paneer, and curd following the latest Council updates.
GST on dairy products in India depends on how the item is sold. Fresh milk, curd, lassi, buttermilk and loose paneer are exempt, while most processed or pre-packaged dairy is taxed at a flat 5% after the 56th GST Council revision.
India’s Goods and Services Tax (GST) framework for dairy and plant-based milk products has undergone substantial revisions following the 56th GST Council meeting in September 2025. These changes aim to streamline tax slabs, update exemptions, and clarify rates for a variety of goods in the dairy sector.
Key Amendments
- The majority of processed and pre-packaged dairy products are now subject to a unified 5% GST rate, replacing the previous tiered system of 5%, 12%, and 18%.
- Fresh, pure, or pasteurized milk, along with unpackaged paneer, curd, lassi, and buttermilk, continue to be exempt from GST.
- Plant-based milk and soya milk beverages have been explicitly included in the 5% GST slab.
- All milk cans, irrespective of whether they are made of iron, steel, or aluminum, now attract a 5% GST.
GST Taxability for Milk, Paneer, and Curd Production and Sale
The 56th GST Council meeting, held on September 3, 2025, implemented significant reforms regarding GST rates on milk and dairy items. These changes were introduced to simplify the existing tax structure and enhance compliance ease for businesses. Previously, various dairy products were taxed at different GST rates, ranging from 5% to 18%. For instance, paneer and UHT milk were taxed at 5%, while ghee and butter attracted a 12% rate.
Effective September 22, 2025, many essential dairy goods, including UHT milk and paneer, have been granted GST exemption. Concurrently, products such as butter, ghee, and cheese now fall under a reduced 5% GST rate. Milk cans, which were previously taxed at 12%, also benefit from a reduced 5% rate. This rationalization aims to lessen the financial burden on consumers, stimulate growth within the dairy industry, and provide support to small-scale farmers by decreasing costs and mitigating tax evasion. These adjustments underscore the focus on essential food items within the broader GST 2.0 reforms.
GST Rates and HSN Codes for Milk, Paneer, and Curd
The table below outlines the specific HSN (Harmonized System of Nomenclature) codes and corresponding GST rates for various milk, paneer, and curd products, reflecting the latest amendments.
| HSN Code | Description | GST Rate |
|---|---|---|
| 0401 | Fresh milk and pasteurised milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, UHT milk | Exempt |
| 0402 | Milk and cream, concentrated or containing added sugar or other sweetening matter, including condensed milk | 5% |
| 0403 | Yoghurt; Cream, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavored or containing added fruit, nuts or cocoa; Pre-packaged and labelled Curd, Lassi and Butter milk | 5% |
| 0403 | Curd, Lassi, Butter milk, other than pre-packaged and labelled | Exempt |
| 0404 | 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 | 5% |
| 0405 | Butter and other fats and oils derived from milk, including ghee; dairy spreads | 5% |
| 0406 | Cheese, other than chena or paneer | 5% |
| 0406 | Chena or paneer, whether or not pre-packaged and labelled | Exempt |
| 2202 99 | Plant-based milk drinks, ready for direct consumption as beverages | 5% |
| 2202 99 10 | Soya milk drinks, whether or not sweetened or flavoured | 5% |
| 2202 99 30 | Beverages containing milk | 5% |
| 7310, 7323, 7612, or 7615 | Milk cans made of Iron, Steel, or Aluminium | 5% |
Calculating GST on Dairy Products
As of September 22, 2025, fresh and pasteurized milk continue to be entirely exempt from GST. Similarly, pre-packaged items like UHT milk, paneer, and curd are now also exempt, providing zero tax benefits to consumers. Conversely, dairy products such as butter, ghee, cheese, and similar items are subject to a reduced GST rate of 5%.
For illustration, if a packet of butter is priced at Rs. 200, the applicable GST would be:
200 × 5% = Rs.10
This makes the final consumer price Rs. 210.
Input Tax Credit Entitlements for Dairy Products
Under Section 16(1) of the CGST Act, any registered taxable individual is eligible to claim an input tax credit (ITC) on goods and services acquired for furthering their business operations as a seller of these dairy products. However, Section 17(5) of the CGST Act specifies various scenarios where ITC cannot be claimed. Detailed conditions are available here.
Special GST Provisions for Fortified and Concentrated Milk
Fortified toned milk, which is toned milk enhanced with essential vitamins like A and D, is exempt from GST. This exemption aligns with CBIC Circular No. 52/26/2018-GST dated August 9, 2018. The policy supports public health initiatives by ensuring that nutritionally improved milk products remain affordable. Fortified toned milk falls under HSN code 0401.
Khoya or mawa is classified as concentrated milk according to F. No. 332/2/2017 – TRU, falling under HSN code 0402. Currently, khoya/mawa is also exempt from GST based on this classification.
FAQs: GST on Dairy Products
- What is the GST rate on milk?
Fresh, pure or pasteurized milk is exempt (0%). Plant-based and soya milk beverages are taxed at 5%. - Is paneer taxed under GST?
Unpackaged paneer is exempt, while pre-packaged paneer attracts 5% GST. - What is the GST on curd, lassi and buttermilk?
Unpackaged curd, lassi and buttermilk are exempt; their pre-packaged versions are taxed at 5%. - What changed at the 56th GST Council?
Held on 3 September 2025, it moved most processed and pre-packaged dairy to a unified 5% rate, replacing the earlier 5%, 12% and 18% slabs. - What is the GST rate on milk cans?
Milk cans made of iron, steel or aluminium all attract 5% GST.
