GST on Dairy, Poultry & Fishery Products – Updated List

Get the latest updated list of GST rates on dairy, poultry, and fishery products in India. Understand exemptions, taxable items, and GST compliance for your small business with TaxRobo’s expert guide.

The dairy, poultry, and fishery sectors are the backbone of India’s agrarian economy, providing livelihoods to millions and contributing significantly to the nation’s food security. For small business owners operating in these industries, understanding the complexities of the Goods and Services Tax (GST) is not just a legal requirement but a crucial aspect of financial management. The core challenge often lies in deciphering the nuances of the GST on Dairy, Poultry & Fishery Products, as the applicable tax rate can change dramatically based on a single factor: whether a product is fresh, processed, or sold in a pre-packaged and labelled form. This distinction between loose and branded goods has created confusion for many entrepreneurs, leading to potential compliance errors. This blog post aims to be your definitive guide, providing a clear, updated, and comprehensive breakdown of the GST rates, exemptions, and compliance requirements to help your business thrive and avoid unnecessary penalties.

A Quick Refresher on GST for Agri-Allied Businesses

Before diving into the specific rates for milk, chicken, and fish, it’s essential to understand the fundamental components of the GST framework. This basic knowledge will empower you to classify your products correctly and manage your tax obligations with confidence. GST is not a single tax but a dual levy system that simplifies the previous labyrinth of indirect taxes like VAT, Service Tax, and Excise Duty. For any business owner, grasping these basics is the first step towards seamless tax management and leveraging benefits like the Input Tax Credit (ITC), which prevents the cascading effect of taxes and ultimately reduces the cost of your products.

Understanding CGST, SGST, and IGST

The GST you charge on your invoice is split into different components depending on the location of your customer. This structure is designed to ensure that both the Central and State governments receive their share of the tax revenue. Understanding this is vital for correct invoicing and filing.

CGST (Central Goods and Services Tax): This is the tax collected by the Central Government on an intra-state sale (i.e., when the transaction happens within the same state).
SGST (State Goods and Services Tax): This is the tax collected by the State Government on the same intra-state sale. For example, if you sell packaged paneer in Maharashtra to a buyer in Maharashtra and the GST rate is 5%, you will charge 2.5% as CGST and 2.5% as SGST.
IGST (Integrated Goods and Services Tax): This tax is collected by the Central Government on an inter-state sale (i.e., when you sell goods from one state to another). For instance, if you supply ghee from Gujarat to a distributor in Rajasthan at a 12% GST rate, you will charge the full 12% as IGST on your invoice.

Why HSN Codes are Crucial for Your Products

The Harmonized System of Nomenclature (HSN) is a globally accepted system for classifying goods. In the GST regime, every product has a unique HSN code that determines its applicable tax rate. For businesses in the dairy, poultry, and fishery sectors, using the correct HSN code is non-negotiable. It is the foundation of accurate GST calculation, invoicing, and return filing. Using the wrong code can lead to charging an incorrect tax rate, which could result in tax notices, penalties, and interest charges from the authorities. Therefore, meticulous classification of your products using the right HSN code is the first and most critical step towards ensuring proper GST compliance for dairy products India and other allied sectors. You can refer to our detailed HSN & SAC Code Complete Guide – Choosing the Correct Code for GST for assistance. It removes ambiguity and ensures uniformity in taxation across the country.

GST on Dairy Products in India: A Detailed Breakdown

The dairy sector has a particularly intricate GST structure, with rates varying from nil to 12% based on processing and packaging. For a small dairy farmer, a local sweet shop, or a branded milk producer, knowing these differences is key to correct pricing and compliance. The recent GST rates on dairy and poultry have been updated, especially concerning pre-packaged items, making it essential for businesses to stay informed.

GST Exempted Dairy Items (Nil Rated)

The government has exempted most essential, unprocessed food items from GST to keep them affordable for the masses. For the dairy industry, this means that fresh and unprocessed products sold in a loose or unbranded format do not attract any tax.

Fresh and pasteurised milk: This applies when the milk is not pre-packaged and does not carry a brand name.
Curd (not in a pre-packaged and labelled form): Loose curd sold by local dairies is exempt.
Lassi and Buttermilk (not in a pre-packaged and labelled form): These traditional beverages remain GST-free when sold unbranded.
Chenna or Paneer (not in a pre-packaged and labelled form): Fresh, loose paneer is also exempt from GST.

The 5% GST Slab: Pre-Packaged and Labelled Dairy

A significant change introduced by the GST Council was bringing pre-packaged and labelled essential food items into the tax net. This move was aimed at levelling the playing field between branded and unbranded players. If you sell dairy products that are packed and labelled before they reach the customer, they will now attract a 5% GST rate.

Pre-packaged and labelled Milk
Pre-packaged and labelled Curd
Pre-packaged and labelled Paneer
Pre-packaged and labelled Lassi and Buttermilk

Dairy Products in the 12% GST Slab

As dairy products undergo more processing, the GST rate generally increases. Items that have a longer shelf life and are considered value-added products typically fall under the 12% slab. Understanding this is crucial for businesses that produce a mix of fresh and processed goods.

Butter
Ghee
Cheese
Condensed Milk
Flavoured Milk (with brand name)

Input Tax Credit (ITC) for Dairy Businesses

One of the significant advantages of being registered under GST is the ability to claim Input Tax Credit (ITC). This means you can reduce your final tax liability by claiming credit for the GST you paid on your business inputs. For a dairy business, this includes GST paid on the purchase of milking machinery, pasteurizers, packaging materials, chilling units, transportation services, and other operational expenses. By claiming ITC, you ensure that the tax is levied only on the value addition at each stage, making your business more competitive. For a detailed breakdown of the rules, see our GST Input Tax Credit (ITC) Full Guide 2025 – Eligibility, Limits & Common Issues. This is a core part of dairy products GST India compliance that directly impacts your profitability.

Navigating GST on Poultry Products in India

The poultry sector, another pillar of the Indian agricultural economy, also has a specific set of GST rules. The tax treatment primarily depends on whether the product is live, fresh, frozen, or processed. For poultry farmers and suppliers, clarity on these distinctions is vital for maintaining accurate books and filing correct returns.

Live Poultry and Eggs: The Exemption Rule

In line with the policy of keeping basic food items tax-free, the government has exempted the primary output of the poultry industry from GST. This is a major relief for small-scale poultry farmers.

Live poultry (e.g., chickens, ducks, turkeys) is exempt from GST.
Fresh eggs in the shell are also exempt from GST. This ensures that a staple protein source remains affordable for consumers.

GST on Chicken: Fresh vs. Packaged

The principle of “processing and packaging” applies to chicken and other poultry meat as well. The tax liability is triggered the moment the product is put into a pre-packaged and labelled form.

Fresh, chilled, or frozen chicken that is not pre-packaged and labelled is exempt from GST. This covers the majority of chicken sold in local butcher shops.
However, pre-packaged and labelled chicken, whether fresh, chilled, or frozen, attracts a 5% GST rate. This is applicable to products sold in supermarkets and by organized retailers.

GST Implications and Benefits for the Poultry Industry

The introduction of GST has brought several benefits to the poultry sector by formalizing the supply chain. One of the key GST benefits for poultry industry is the streamlined availability of Input Tax Credit. Poultry businesses can now claim ITC on various inputs such as poultry feed, supplements, medicines, machinery, and equipment used in their operations. This organized tax structure reduces the overall cost of production and improves business efficiency. It encourages better record-keeping and transparency, which can also help businesses secure financing and expand their operations, a significant advantage for the growing poultry products GST India market.

The Impact of GST on Fishery Products

The fishery sector, crucial for coastal economies and a significant source of protein, follows a similar GST logic as dairy and poultry. The impact of GST on fishery products is seen across the supply chain, from the fisherman to the final consumer, with taxability determined by the form in which the fish is sold.

GST Exemptions for Fishery Products

To support the livelihoods of fishermen and keep fish affordable, most raw and unprocessed fishery products are exempt from GST. This is one of the key GST exemptions for fishery products.

Fish, fresh or chilled, is exempt from GST. This includes most types of fish sold in local markets.
Frozen fish is also exempt, provided it is not pre-packaged and labelled.

When is Fish Taxable under GST?

The tax exemption ends once the fishery products are processed or sold in a pre-packaged and labelled format. This is an important distinction for businesses involved in fish processing and organized retail.

Pre-packaged and labelled fish, whether fresh, chilled, or frozen, is taxable at a 5% GST rate.
Processed fish, such as dried, salted, or smoked fish, also falls under the 5% GST slab. This includes fish that has been cured or prepared for preservation.

How GST Affects the Fishery Supply Chain

The GST regime has helped formalize the previously unorganized fishery supply chain. By bringing processors, wholesalers, and organized retailers into the tax net, it has improved transparency and accountability. The availability of ITC on inputs like ice, packaging materials, processing equipment, and transportation has made the sector more efficient. This formalization, a direct impact of GST on fishery products, helps businesses manage their finances better, maintain proper records, and access formal credit, thereby contributing to the overall growth and modernization of the fishery products GST India sector.

Ensuring Compliance: Recent GST Updates and Best Practices

Staying compliant with GST is not just about knowing the rates; it involves adhering to registration norms, proper invoicing, and keeping abreast of frequent updates. For businesses in the dairy, poultry, and fishery sectors, this is crucial for avoiding penalties and ensuring smooth operations.

GST Registration Thresholds for Small Businesses

It is important to know when you are legally required to register for GST. In India, the current threshold for mandatory GST registration for businesses exclusively supplying goods is a turnover of ₹40 lakhs in a financial year (₹20 lakhs for special category states). If your turnover from taxable supplies (like pre-packaged paneer or frozen chicken) exceeds this limit, you must register for GST. For a complete walkthrough of the process, consult our Ultimate Guide to GST Registration for Small Businesses.

The Importance of Proper Invoicing and E-invoicing

A GST-compliant invoice is a fundamental document. It must contain all the prescribed details, such as your GSTIN, the customer’s GSTIN, HSN codes for products, and the correct breakup of CGST, SGST, or IGST. Proper invoicing is essential for your customers to claim their Input Tax Credit seamlessly. For businesses with a specified turnover, e-invoicing (generating invoices through a government portal) is mandatory, further standardizing the process and preventing tax evasion.

Staying Informed on GST Rate Changes

The GST Council meets periodically, and its decisions can lead to changes in tax rates and rules. It is vital for business owners to stay updated on these developments. Regularly checking the official GST portal is the best way to get authentic information on the latest GST updates for dairy and poultry sectors. You can find notifications, circulars, and press releases on the official website.

For the most reliable information, always refer to the Central Board of Indirect Taxes and Customs (CBIC) portal: CBIC-GST Official Website.

Conclusion

Navigating the tax landscape for agri-allied products can seem daunting, but a clear understanding of the rules can transform it from a challenge into a business advantage. The central theme for GST on Dairy, Poultry & Fishery Products is straightforward: the taxability hinges almost entirely on the level of processing and packaging. While fresh, loose, and unprocessed goods are largely exempt to support farmers and keep essentials affordable, the moment they are pre-packaged and labelled, they typically attract a 5% GST. Higher value-added items like ghee and cheese are taxed at 12%. For any business owner in these sectors, accurate HSN classification, proper invoicing, and staying updated on GST regulations are the cornerstones of compliance. This not only helps in avoiding legal issues but also enables you to fully leverage benefits like the Input Tax Credit, making your operations more cost-effective and competitive.

Feeling overwhelmed by GST compliance? Let TaxRobo handle it for you. From GST registration and filing to expert advisory, our team ensures your business stays compliant and tax-efficient. Contact us today for a free consultation!

Frequently Asked Questions (FAQs)

1. Q: Is there GST on loose milk sold by a local milkman?
A: No, fresh or pasteurised milk that is not pre-packaged or branded is exempt from GST.

2. Q: As a small farmer, do I need to register for GST to sell my poultry eggs?
A: Fresh eggs are exempt from GST. You only need to register for GST if your total taxable turnover from other products/services exceeds the prescribed threshold (e.g., ₹40 lakhs for goods).

3. Q: What is the GST rate on branded ghee and butter?
A: Branded ghee and butter attract a GST rate of 12%.

4. Q: I sell pre-packaged frozen fish to supermarkets. What GST rate applies?
A: Pre-packaged and labelled frozen fish falls under the 5% GST slab.

5. Q: Can I claim an Input Tax Credit (ITC) on the packaging materials I buy for my branded paneer?
A: Yes. Since your final product (branded paneer) is taxable at 5%, you are eligible to claim ITC on the GST paid for inputs like packaging materials, subject to GST rules.

GST on Dairy, Poultry & Fishery Products: Rates List!