Will Mother Dairy cut prices after GST change?

• GST reduction on dairy: Mother Dairy to pass benefits to consumers, effective Sept 22.
• Reduced GST boosts affordability, demand for packaged dairy, milk and other products.
• UHT milk, paneer, chena GST reduced to 0%; plant-based milk drinks now at 5%.

GST on Paneer, Ghee, Cheese, Butter: Mother Dairy on Thursday said it will pass on the benefits of the reduction in GST on a wide range of products to

consumers. Mother Dairy is one of the leading dairy firms in the country. It clocked a turnover of Rs 17,500 crore in the last fiscal year. GST tax rates on common use items ranging from hair oil to corn flakes, TVs, and personal health and life insurance policies were slashed after the all-powerful GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax regime.

New GST Rates

The GST Council approved rate overhaul by limiting slabs to 5 per cent and 18 per cent effective from September 22, the first day of Navaratri.

Reacting to the decision of the GST Council, Manish Bandlish, Managing Director of Mother Dairy, told PTI, " 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."

The move would significantly boost the affordability and accessibility of value-added dairy products for consumers.

"This is a particularly big boost for packaged categories, which are fast-growing favourites in Indian homes and will see stronger demand momentum going forward," Bandlish said.

Mother Dairy is committed to ensuring that the advantages of this reform are effectively passed on to the consumers, he assured.

"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," Bandlish said.

The reduction in GST rates for a wide range of dairy products would create stronger market opportunities for farmers.

Goods and service tax on ultra-high temperature milk, chena, and paneer has been reduced to zero from 5 per cent, while all Indian breads will now see a nil rate.

All dairy milk, other than UHT milk, was already exempt from GST. Hence, UHT milk has been exempted to provide the same tax treatment to similar goods. Plant-based milk drinks, except soya milk drink, attracted 18 per cent GST while soya milk drink attracted 12 per cent GST. The goods and services tax rate on plant-based milk drinks and soya milk drinks has now been reduced to 5 per cent.

The new rates for all products, except gutkha, tobacco and tobacco products and cigarettes, will be effective September 22 -- the first day of Navratri, she said.