Verka clarifies: Daily milk pouches exempt from GST, so there’s no change in prices

On Wednesday, Verka’s Mohali unit also wrote to P. Lal, former DG Punjab who had raised the milk price issue.

In its reply, Verka said, “We would like to clarify that there was never any GST applicable on milk. Hence, there has been no scope for reduction in its price. The benefit of GST reduction has been passed on in other milk products where GST was earlier applicable, and rates of those items have already been revised accordingly.”

It was added, “Since milk continues to be exempt from GST, its price remains unchanged. We hope this clears your doubt.”

Verka paneer which was Rs 90 is now Rs 85.

Verka’s one-litre tetra pack of ultra-high temperature processed (UHT) milk now costs Rs 74, down from Rs 76, as the GST rate has been reduced from 5% to zero.

It was specified that the pouch milk remains exempted from GST and thus no change in price.

Verka has also reduced the price of ghee by Rs 35 and cut the price of pasteurised butter by Rs 30. Even icecream prices have come down by Rs 10.

Mother Dairy too had announced reduction in prices of most of its value‑added dairy and processed food products from September 22 in order to fully pass on the benefit of the GST rate cuts to consumers.

The UHT (tetrapack) milk price reduced by Rs 2 per litre — from Rs 77 to Rs 75. Paneer (200 gm) has been reduced from Rs 95 to Rs 92.

Similarly, butter, cheese, ghee etc. have also shown price reductions.

Ajay Jagga, GST expert, while speaking to The Indian Express, said, “The GST 2:0 is settling slowly and shows that there is an urgent need for effective helpline in UT by GST and Consumer Affairs Department for clarifying the issues related to rate of tax and impact on prices. For example, the milk pouches, which people use every day are exempted and the tetra packs are taxable. So, the impact of GST 2.0 is that the tetra pack will be cheaper but the plastic pouches will remain the same, since they were not taxable. Thus the pouched milk prices will not be impacted. Like these many issues are coming up but will take some time to settle down, However, the ‘NOW AND THEN’ boards will be the best way.”

Jagga had also written to Rohit Yadav, managing director, Haryana Dairy Development Cooperative Federation Ltd. (HDDCF) Chandigarh.

He had mentioned about Legal Obligation – Section 171 CGST Act, 2017 (Anti‑Profiteering Provision). It says that under Section 171 of the Central Goods and Services Tax Act, 2017, any reduction in rate of tax or input tax credit benefit must be passed on to consumers by commensurate reduction in prices. Failure to do so may constitute profiteering and attract enforcement and penalties.

“In view of the above, I respectfully request that Verka and Vita products to revise price lists for milk, cheese, butter, ghee, and other dairy/processed food products to reflect the benefit of the GST rate cuts, ensure that the reductions are clearly communicated to consumers (price‑tags, advertisement, display, etc.) and provide confirmation of the revised rates (old vs new) and the date of implementation,” he had said.

Jagga had also added that if “Verka / Vita products do not carry out the necessary price reductions in line with GST 2.0 he shall be constrained to file grievance complaint with the Anti‑Profiteering Authority under Section 171 of the CGST Act for enforcement of reductions of prices, in public interest. Non-reduction of prices can also result in prosecution”.

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