Trade and Industry is still working out the revised cost of their products/services under the GST regime. GST regime has affected the Dairy Industry negatively. The GST Rates on dairy products are as under:
A) GST RATES ON DAIRY PRODUCTS:
HSN | NAME OF PRODUCT | GST RATE |
0401 | Fresh milk and pasteurized milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk | EXEMPTED |
0403 | Curd; Lassi; Butter milk | EXEMPTED |
0406 | Chena or paneer, other than put up in unit containers and bearing a registered brand name; | EXEMPTED |
0401 | Ultra High Temperature (UHT) milk | 5% |
0402
|
Milk and cream, concentrated or containing added sugar or other sweetening matter, including skimmed milk powder, milk food for babies [other than condensed milk] | 5% |
0403 | Cream, yogurt, 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 | 5% |
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% |
0406 | Chena or paneer put up in unit container and bearing a registered brand name | 5% |
0405 | Butter and other fats (i.e. ghee, butter oil, etc.) and oils derived from milk; dairy spreads | 12% |
0406 | Cheese | 12% |
2202 90 30 | Beverages containing milk | 12% |
0402 91 10,
0402 99 20 |
Condensed milk | 18% |
2106 | Milk containing edible nuts with sugar or other ingredients | 18% |
B) TRANSPORTATION OF MILK CONTINUES TO BE EXEMPTED:
Govt. following the earlier practice under Service Tax regime, has continued to keep the transportation of `Milk’ exempt as under:
i) Services by way of transportation by rail or a vessel from one place in India to another
ii) Services provided by a goods transport agency, by way of transport in a goods carriage
C) OUTSOURCED PROCESSES AMOUNTING TO MANUFACTURE TO BEAR GST:
Milk products are highly perishable in nature and therefore, requires refrigeration, pasteurization and packaging of products at the consumer point, so as to retain the freshness and nutrients of the edible product. Therefore, dairy industry, outsources a number of activities to job-workers/service providers right from the point of collection of raw milk till the point of consumption of products.
Some of the job works such as, any treatment or process undertaken by a job-worker on goods belonging to another person, which amount to manufacture were covered by the `Negative List’ of services under the Finance Act, 1994. `Packaging of Milk’ and incidental processes such as refrigeration and pasteurization used to fall in the definition of `Manufacture’ and therefore were out of the ambit of Service Tax. Milk being `Zero Rated Product’ under CETA, 1985, had the benefit of availing these `Manufacturing Services’ without `Service Tax’ levy, thereby reducing the cost of milk, which is an essential product for the consumption of mass.
Job work, now under GST, is defined in a broader perspective to include any treatment or process done by a job-worker, irrespective of whether the activity results in manufacture or is an essential operation to complete the manufacturing process. Further, the new law i.e. GST does not provide for any such exemption and therefore, all job-works undertaken for manufacturing of processed milk are now liable for GST and that too at higher rate i.e. 18%.
Therefore, the `Amul Girl’ , post-GST, may not appear as smiling in advertisement as had been in lat 50 years
(The author is a Jaipur based practicing Chartered Accountant and can be reached on 09829063908, [email protected])
is only milk Packaging service attract GST?
itis informative, please keep it up.
Further my querry to taxguru and reader is about the GST on Transport Charges of Processsed Milk Paked in small Packets ?
Can it be still agriculture commodity and no GST on transport charges ?
or 5% GST on Transport Charges ?
Please clarify.
Thanks
Dear Sir,
I want know about Milk business, I am purchase milk from unregistered village dealers but i have processing unit for packaging milk and other, I am selling milk after all processing and packaging. I have doubt this is exempted or not. If not exempted what is process for accounting and GST tax rate.
warm regards
Manish
MILK SALE UNDER BRAND NAME IS LIABLE TO GST ? WHAT IS RATE OF GST