Why your everyday-milk pouches are not getting cheaper despite the GST rejig

India’s dairy giants, Amul and Mother Dairy, have made it clear that pouch milk, the staple choice for millions of households, will remain unaffected by the recent Goods and Services Tax (GST) overhaul.

Mother Dairy unveiled its revised pricing on Tuesday, cutting prices on UHT milk among other dairy prodcuts, while everyday pouch milk—including Full Cream, Toned, and Cow Milk—remains unaffected.

The reason is straightforward: pouch milk continues to enjoy GST exemption, so the recent tax changes have no impact on its pricing.


"There is no change proposed in prices of fresh pouch milk as there is no reduction in GST. It has always been zero percent GST on pouch milk,” said Jayen Mehta, Managing Director of Gujarat Co-operative Milk Marketing Federation (GCMMF), which markets Amul products.

ALSO READ: Mother Dairy to slash paneer, butter & certain milk prices as company passes on GST benefits. Check new prices

Earlier, some media reports suggested that pouch milk prices could be reduced by Rs 3 to Rs 4 under the GST 2.0 framework.

However, Mehta clarified that such reports are inaccurate as pouch milk has always been exempt from GST. The relief under the new tax structure will only apply to UHT milk, which will now become cheaper with the GST rate cut from 5 per cent to nil.

ALSO READ: Amul rules out pouch milk price cut; only longlife UHT milk to get GST relief

UHT in milk stands for Ultra-High Temperature (or Ultra Heat Treatment) processing, which involves heating milk to at least 135°C (275°F) for a few seconds, killing nearly all microorganisms and creating a sterile product. This process, combined with aseptic packaging like Tetra Packs, gives UHT milk a long shelf-life of several months without refrigeration.

On September 3, Finance Minister Nirmala Sitharaman announced the new GST measures, calling it a historic reform aimed at easing the cost of living and boosting economic activity. Termed the "Next-Gen GST Reform," the sweeping rate cuts are expected to benefit households, farmers, businesses, and the healthcare sector.

The 56th GST Council meeting decided to rationalise GST rates into two slabs, 5 per cent and 18 per cent by merging the existing 12 per cent and 28 per cent rates. The move is being seen as a major Diwali gift to the nation.