Cutting GST Rates For Dairy Products To 5% Will Benefit Farmers & Consumers: Milky Mist Dairy Food's Official

Chennai: The decision to reduce the GST rates to a range of dairy products to 5 per cent would have far-reaching benefits for consumers, farmers, a top official of Milky Mist Dairy Food Ltd has said.

The move would make nutritious, value-added dairy products such as cheese, butter, ghee, paneer more "affordable" and "accessible," K Rathnam, CEO of the Tamil Nadu-based dairy products maker, has said.

"For the dairy sector, it is a timely boost that will stimulate demand, encourage innovation and strengthen the formal, organised dairy ecosystem. At Milky Mist, we see this as more than a tax reform, a catalyst for inclusive growth," he said.

In a statement issued here on Friday, Rathnam said the lower GST would expand the market for high-quality, packaged dairy products, enabling more consumers to shift from unregulated supply chains to safe, standardised offerings.

"This transition not only benefits public health but also creates stronger, more stable demand for the millions of dairy farmers who form the backbone of our industry," he said. The GST reduction also aligns with the country's nutritional vision of making protein and calcium-rich foods more affordable, especially in rural and semi-urban areas.

"As an industry, we now have an opportunity and a responsibility to reinvest these gains into farmer training, sustainable sourcing, cold chain infrastructure and product innovation that meets evolving consumer needs," he said.

The GST rate on ultra-high temperature (UHT) milk is reduced to nil from 5 per cent, under the revised structure which was announced on September 3. The GST on paneer/chhena (pre-packaged and labelled) has been reduced from 5 per cent to nil. Butter, ghee, dairy spreads, cheese, condensed milk, milk-based beverages would attract 5 per cent GST with effect from 22 September 2025, as compared to the current 12 per cent. 

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