A delegation led by K. Balakrishna Reddy of the Indian Dairy Association and Dodla Dairy petitioned Telangana’s Commercial Taxes Commissioner for clear GST guidelines on flavoured milk. Industry members report that most businesses are currently applying a 5% GST rate, treating flavoured milk as HSN 0402 (milk products) rather than as aerated beverages. This classification is supported by recent High Court rulings in Andhra Pradesh (Sri Vijaya Visakha Milk Producers Co.) and Madras High Court (Parle Agro), reinforcing that minor flavour additions do not reclassify these as beverages
Despite judicial direction, tax ambiguity persists, increasing litigation risk and adding compliance uncertainty. The dairy sector emphasized that misclassification or higher taxation could hurt both rural livelihoods and consumer prices. The Registrar assured that the matter will be escalated to the GST Council for resolution.
Industry Insight
Formal GST clarification will stabilize compliance, reduce litigation, and support rural dairy profitability, particularly in value-added segments. Aligning tax treatment with judicial precedent is vital for sector growth.