In good news for consumers, milk has become cheaper by Rs 2/litre as Mother Dairy announced slashing of prices. This comes close on the heels of next-generation reforms in the Goods and Services Tax (GST). 

The reduced prices will come into effect in a week’s time from now, preferably September 22, by when the new GST slabs will apply on products.

Besides milk, the reduction in prices is set to apply to a range of dairy products including cottage cheese, butter, cheese and ice-creams, following the revision of GST rates, for food products.

The development comes on the back of a major revamp in GST, under which the government has provided relief to citizens by reducing taxes on essential food items and stationary products. Tax rates were slashed down to 5 per cent and nil, from the earlier 12 per cent and 18 per cent slab.

Food items like ultra-high temperature (UHT) milk, paneer/chena, breads like paratha/parotta, khakhra, chapati/roti and pizza bread were exempted from GST. The indirect taxes on packaged food/snacks, chocolates, sauces, juices, coffee, etc. was also reduced to 5 per cent, boosting demand and industry growth.

Notably, Mother Dairy in an earlier statement had said that it will pass on the benefits to the consumers.

Mother Dairy Managing Director Manish Bandlish, reacting to the GST council’s decision on September 4 had said, “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.”

“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.

There is no announcement of price cut by Amul, another dairy behemoth, so far, but all the leading brands are likely to follow suit.