gst on lassi: Goods and Services Tax | Lassi is exempt from GST, but not flavored milk – Lassi is exempt from goods and services tax.
- Flavored milk will be subject to 12% GST.
- Flavored milk is made by adding sugar and permitted flavors to the milk.
- Yogurt, lassi and buttermilk come under a specific classification (HSN 040390) and are exempt from GST.
Goods and Services Tax: The GST Authority for Advance Rules (AAR-Gujarat) has recognized that lassi is exempt from Goods and Services Tax (GST). The AAR has recently given this result in one case. On the other hand, due to the complexity of the classification, the AAR bench has said in the past that flavored milk is not exempt from GST. In the case of lassi, the entire Dairy & Grotech, a manufacturer and supplier in Valsad, had approached AAR-Gujarat regarding the GST rate applicable to lassi. The Valsad-based dairy sells lassi under the brand name ‘Allen’. Plain (without sugar or salt), salted with cumin, sweet strawberries with sugar, and sweet blueberries with sugar are sold in four flavors.
What did the AAR bench say?
The main ingredients in making and selling lassi are yogurt, water and spices, the AAR bench said. Ingredients displayed on the bottle include pasteurized toned milk, spices, mint, green pepper, ginger, salt, active culture, natural added flavors and stabilizers. The bottle showed that it was a ‘dairy based fermented drink’. Fortunately for manufacturers and end consumers, yogurt, lassi and buttermilk come under a specific classification (HSN 040390) and are exempt from GST. Tax experts point out that producers and suppliers of tasty milk are not so lucky.
12% GST on flavored milk
Gujarat AAR itself, in the case of Amul, which produces and supplies flavored milk, is expected to get 12% (HSN 22029930) GST rate on flavored milk. Flavored milk is made by adding sugar and permitted flavors to the milk. “In short, lassi and flavored milk are dairy drinks, but classification codes treat them differently,” says a tax expert.
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