GST Rate Cut: Will Milk, Paneer, Butter And Ice Cream Get Cheaper? Here’s What Amul & Mother Dairy MDs Said

GST Rate Cuts: The government’s decision to reduce Goods and Services Tax (GST) rates on dairy products has been warmly welcomed by India’s leading dairy cooperatives, who said the move will make milk products more affordable, increase consumption, and strengthen farmer incomes.

As part of the GST 2.0 rationalisation, the GST rate on major dairy products has been brought down from 12 per cent to 5 per cent. The change covers a wide range of food items such as butter, ghee, cheese, paneer, UHT milk, milk-based beverages, and ice creams.

Industry leaders said the step is a landmark reform that will support millions of farmers associated with India’s dairy sector.

Amul Welcomes Reform

In an exclusive interaction with ANI, Jayen Mehta, Managing Director of Gujarat Co-operative Milk Marketing Federation (Amul), expressed gratitude to the government.

“On behalf of the 36 lakh farmer families affiliated with the Amul Dairy Cooperative Movement in Gujarat and more than 10 crore families associated with the dairy industry of the country, we are thankful to PM Modi and FM Nirmala Sitharaman for this landmark decision of reduction in GST rates of most food items and particularly the dairy product categories,” he said.

Mehta added that the move would directly benefit farmers and consumers alike. “More than 30 different dairy and food product categories that we are associated with have seen a significant decline in GST rates. We are really thankful for this welcome step, which has come in conjunction with the recent reduction in income tax rates. This means more money in the hands of consumers and thereby an assured future for millions of milk producers of the country,” he explained.

Mother Dairy’s Support

Mother Dairy’s Managing Director, Manish Bandlish, also praised the reform, calling it progressive for the industry.

“We commend the Union Government’s decision to reduce GST rates on a wider range of dairy products, including paneer, cheese, ghee, butter, UHT milk, milk-based beverages, and ice creams. This progressive step will significantly enhance affordability and accessibility of value-added dairy products for consumers across the country,” he said.

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What Mother Dairy MD Said?  

Bandlish pointed out that packaged dairy items, which are becoming increasingly popular in Indian households, will now see stronger demand momentum.

“By lowering the tax slabs, the move will encourage wider adoption of packaged, value-added dairy products, strengthen consumer preference for safe and quality offerings, and enable more families to enjoy wholesome dairy goodness at better value,” he noted.

Will Milk, Paneer, Butter And Ice Cream Get Cheaper?

Bandlish further highlighted that the organised sector will benefit in a big way. “All these benefits will pass on to the consumer, and we hope that consumption of these products will increase. Organised sector will get a boost,” Bandlish said.

GST Reduced On Dairy Products

The 56th GST Council meeting held on 3rd September 2025 brought good news for households. One of the biggest changes is in dairy products. Ultra-High Temperature (UHT) milk, which was earlier taxed at 5 per cent, will now have no GST at all. Paneer, when pre-packaged and labelled, has also moved from 5 per cent to nil.

Butter and other fats derived from milk, such as ghee and butter oil, saw a reduction from 12 per cent to 5 per cent. Cheese, which also attracted 12 per cent earlier, will now be taxed at only 5 per cent. These cuts make essential protein and fat-rich foods more affordable.