Archive · 25 Jul 2025
Dairy Industry Pushes for GST Reduction on Ghee to 5%
Imagine ghee, a popular cooking item, is taxed more than even some cooking oils.
Dairy industry people want the government to lower the tax on ghee from 12% to 5%.
They say this high tax makes it harder for them to sell ghee and pushes people to buy cheaper, maybe less safe, options.
Lowering the tax could help people buy better ghee, help farmers earn more, and stop fake products from being sold.
Experts also say that people are likely to keep buying more ghee in the coming years.
Stakeholders from the Indian dairy sector are urging the government to reduce GST on ghee to 5% at the upcoming GST Council meeting.
Currently, ghee is taxed at 12% under the GST, higher than even refined oils.
Industry representatives argue the high GST hurts both the industry and public health by encouraging cheaper, unsafe substitutes.
A reduced GST rate of 5% is expected to shift demand to safer, branded options, boost farmer incomes, and curb counterfeits.
Reports predict increasing ghee consumption in India over the next decade.
- Who
- Stakeholders from the Indian dairy sector and industry experts.
- What
- Stakeholders want the GST on ghee reduced to 5%
- When
- The request is for the upcoming 56th GST Council meeting, published July 25, 2025.
- Where
- India
- Why
- To support the industry, increase demand for quality products, and benefit consumer health.
Dairy Industry Advocates
Government
GST Rate Impact
Dairy Industry Advocates
A 12% GST rate impacts farmers incomes and public health. 5% would increase demand for authentic products and support innovation.
Government
N/A
Consumer Choice and Public Health
Dairy Industry Advocates
High GST leads consumers to cheaper, and potentially unsafe substitutes. A lower rate supports formal businesses.
Government
N/A
- Current GST on Ghee
- 12%
- Proposed GST on Ghee
- 5%
- Main Proponent
- Indian Dairy Association (IDA)
- Expected outcome
- Shift demand to safer options, boost farmer incomes, and curb counterfeits
- Predicted Ghee market value by 2033
- ₹7.17 lakh crore
- CAGR (2025-2033)
- 8.4%