The Government of India has released the updated GST rates list for 2025, and dairy products are among the biggest beneficiaries. In a move welcomed by households and the food industry alike, the GST on popular dairy items such as cheese and butter has been reduced, while paneer has been completely exempted from tax. The change is expected to bring noticeable relief to everyday consumers.
Cheese and Butter to Cost Less
Cheese and butter, both widely used in Indian kitchens, have seen a cut in their GST rates. Previously taxed at 12%, they will now attract a reduced rate of 5%. This means packaged blocks of cheese and butter available in supermarkets and local stores will now be significantly cheaper. For families who buy these products regularly, the savings will add up over time.
Paneer Declared GST-Free
Perhaps the biggest surprise in the new list is the exemption of paneer from GST. Paneer, a staple in vegetarian households across India, will now be available at its base price without any tax burden. Until now, packaged paneer carried a 5% GST, but with this change, both packaged and unpackaged paneer will be tax free. This move is expected to make paneer dishes more affordable, whether bought from stores or restaurants.
Other Dairy Products Unchanged
While paneer, cheese, and butter have seen relief, the GST rates on items such as milk powder, condensed milk, and flavored milk remain unchanged at their existing levels. Fresh milk continues to be exempt, as it has been since the introduction of GST. The government has clarified that its focus was on reducing the burden on products with the highest daily consumption.
Industry and Public Reactions
The announcement has been met with widespread approval. Dairy producers believe lower tax rates will increase demand and boost sales, particularly for cheese and butter. Consumers, especially middle-class households, are celebrating the changes as a timely relief amid rising food prices. Restaurant owners and food service operators are also expected to pass on the benefit to customers by lowering the prices of paneer- and cheese-based dishes.
Looking Ahead
The GST Council has hinted that more revisions could be considered in the future to ensure essential food items remain affordable for the public. For now, the 2025 GST rates list marks a positive shift for the dairy sector, making cheese and butter lighter on the pocket and paneer completely tax free.