New GST Rates From September 22: Will Milk Prices Come Down? What Changes Under GST 2.0

The government's new GST rates, effective from September 22nd this year, are set to bring big changes in the dairy sector. While a lot of dairy products will see a price reduction, many consumers have been asking one question: Will milk prices drop after the GST cut?

Milk Pouch Price To remain the same

Fresh pouch milk has always been exempt from GST (0%), so the new changes will not affect its cost. This applies to all major milk brands like Amul, Mother Dairy, Heritage, and Nandini, whose fresh milk prices will stay stable even after September 22.

UHT Milk Prices to Fall After GST Cut

The real relief is for UHT milk, or ultra-high temperature milk, which is processed by heating it at high temperature to increase the shelf life. Earlier, UHT milk carried a 5% GST, but under the new rules, the rate has been cut to 0% (nil GST).
This means UHT milk prices will reduce by up to Rs 4 per litre, starting September 22. For example, Mother Dairy full cream UHT milk, which costs Rs 69 per litre, may come down to around Rs 65-66.

GST Rate Changes for Dairy Products

The 56th GST Council meeting announced several important updates for the dairy industry which will help cut costs for both consumers and dairy producers. Here is the list of GST rate cuts on various products:

Fresh Milk & Pasteurised Milk: 0% GST, no change in prices.

UHT Milk: GST reduced from 5% to 0%, making it cheaper.

Pre-packaged Paneer/Chhena: GST reduced from 5% to 0%.

Butter, Ghee, Cheese, Dairy Spreads, Condensed Milk, Ice Cream: GST reduced to 5% from 12-18%.

Milk Cans (made of iron, steel, or aluminium): GST reduced from 12% to 5%.

Impact on Dairy Industry and Farmers

India's dairy sector, valued at Rs 19 lakh crore, employs more than 8 crore rural dairy farmers. The latest GST rate changes are expected to have a positive impact on both farmers and consumers.

Lower tax rates will reduce operational costs for dairy companies, encourage better competition, and cut down adulteration. At the same time, consumers will save more on products like UHT milk, paneer, butter, ghee, and cheese, especially during the festive season this year.