Pravin Saraswat,  FCA, CS, DISA

Pravin Saraswat, FCA, CS, DISA

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:


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%


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%


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


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,

Click here to check New GST Rate Chart 2017

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