GST on curd, buttermilk: Farmers, cooperatives fear price hike

Officials of cooperatives say that the prices of milk by-products will be increased if GST is raised on dairy machinery and milk machines

The decision of the GST Council in its 47th Meeting held last week in Chandigarh to impose 5% GST on dairy items like “pre- packed, pre-labelled curd, lassi and butter milk” and to increase GST on dairy machinery and milking machines from 12% to 18% has drawn criticism from farmers’ organisations and milk cooperatives. Various cooperatives are waiting for the notification of the Centre to take the next step, while farmers fear that the decision will result in increase in the price of the by-products.

R.S. Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) (Amul) said they are waiting for the notification. “We do not have any clarity at the moment. We have seen newspaper reports that GST will be levied on curd and buttermilk. We are waiting for the notification,” he said, adding that the prices of both the products likely to rise if GST is imposed on them.

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The increase in the GST on dairy machinery and milking machines will have a direct impact on the price of milk too. Pradeshik Cooperative Dairy Federation (PCDF) of Uttar Pradesh, the largest milk producing State in the country, will also meet soon to assess the impact of GST on the by-products and the machinery.

“The impact of this will be on the consumers as prices will increase. We have to assess the impact. We will consult with all district unions of farmers and will approach the government after that,” said PCDF general manager Tapesh Yadav.

All India Kisan Sabha’s (AIKS) leader from Western Uttar Pradesh D.P. Singh said the decision will affect farmers directly. “There are a lot of farmers who make curd and buttermilk at their homes and sell it in their neighbourhoods. Such a taxation will affect their livelihood,” Singh said. Farmers’ leader from Shamli Jitender Singh Hudda said decision to increase GST on milking machines will impact the mechanisation of milking processes. “This will further increase the input cost. The government should also think about nutritional requirements of people,” Hudda said.