VIJAYAWADA: The recent reduction in Goods and Services Tax (GST) on dairy products has come as a major relief to lakhs of households across Andhra Pradesh, with milk unions and private dairies revising prices to pass on benefits ranging from Rs 5 to Rs 50 per kilogram.
Effective from September 22, the reforms have led to price cuts on popular items such as ghee, butter, paneer, ultra-high temperature (UHT) milk and flavoured milk. Fresh milk prices, however, remain unchanged, as milk has never been subject to GST—a clarification that has left some consumers still hoping for a reduction.
Prior to the reforms, GST was levied at 5% on UHT milk and paneer, and 12% on butter, ghee and condensed milk. Now, UHT milk and paneer are exempt from GST, while the rate on butter, ghee and condensed milk has been reduced to 5%, benefiting lakhs of consumers.
Krishna Milk Union – Vijaya Dairy, one of the State’s leading cooperatives representing over 1.5 lakh farmers, promptly implemented the revised pricing. Ghee is now priced at Rs 600 per kg (down from Rs 630), butter at Rs 530 (previously Rs 560), paneer at Rs 380 (earlier Rs 400), UHT milk at Rs 70 per litre (down from Rs 75), and flavoured milk at Rs 120 (previously Rs 125).
“We appreciate the Central Government’s GST Council for reducing rates on dairy products. This move will benefit the dairy sector and the savings should reach consumers directly,” said Chalasani Anjaneyulu, Chairman of Krishna Milk Union. He added that since 84% of the price per litre of milk goes to farmers, there is no scope for reducing fresh milk prices.
Other dairies have followed suit. Visakha Dairy reduced paneer by Rs 20 per kg, butter by Rs 40, and ghee by Rs 44–Rs 50. Sangam Dairy cut butter by Rs 30, ghee by Rs 50, and paneer by Rs 15. In Rayalaseema, Heritage Dairy slashed ghee and butter prices by Rs 50 per kg, paneer by Rs 25, and ice cream by Rs 20–Rs 35. Shreeja (Mother Dairy) is expected to announce price cuts soon.
“When sales increase, it helps farmers too, because more milk is needed for processing into ghee, butter and paneer,” said a farmer from Nadupuru in Krishna district.
“We welcome the GST cuts on ghee and paneer, but we also want some relief on milk, which is an essential household item,” said K Lakshmi Devi, a homemaker in Vijayawada.