Milk is free from GST, but not Flavoured Milk 

The government clarified in July of this year that fresh milk and pasteurised milk are completely exempt from Goods and Services Tax (GST). However, a nominal 5% GST applies to pre-packaged and labelled curd, lassi, buttermilk, and paneer, as well as Ultra High-Temperature Milk. 

What about flavoured milk, though? Is it simply milk or a beverage, or will it incur 5% GST if sold in pre-packaged form? An Appellate Authority of Advance Ruling (AAAR) has determined that flavoured milk is not milk, but rather a milk-containing beverage. 

Following the ice cream manufacturer Vadilal's request for clarification on the matter, the supreme appellate court stated that compared to pre-packaged milk, flavoured milk is subject to a higher rate of 12 percent GST. 

The Gujarat AAAR upheld the AAR's classification decision and stated that flavoured milk is not milk but a milk-containing beverage. It ruled that such milk is not in its natural state, but rather was produced through the application of specific processes to milk. 

Read More About this news