Mother Dairy Slashes Prices Following GST Rate Cuts
Mother Dairy has announced significant price cuts across its product range, effective September 22, in response to recent GST rate reductions. The company's entire portfolio now falls under either nil or 5% GST category. UHT milk and paneer are now GST-exempt, while products like ghee, butter, cheese, and ice creams have moved to the 5% GST slab. The price reductions are expected to benefit both consumers and farmers, potentially stimulating demand in the dairy sector.
*this image is generated using AI for illustrative purposes only.
Mother Dairy, a leading dairy products company and subsidiary of the National Dairy Development Board, has announced significant price reductions across its product range. The price cuts, effective from September 22, come in response to the recent Goods and Services Tax (GST) rate reductions approved by the GST Council on September 3.
GST Rationalization
The GST Council's decision has streamlined the previous four-tiered tax structure into a simplified two-slab system. The new structure comprises a standard rate of 18% and a merit rate of 5%. As a result of this rationalization, Mother Dairy's entire product portfolio now falls under either the nil or 5% GST category.
Product-Wise GST Changes
The GST rate changes have had a significant impact on various dairy and processed food products:
- Zero GST: UHT milk and paneer will now be exempt from GST.
- 5% GST Slab: Products such as ghee, butter, cheese, milkshakes, ice creams, frozen snacks, jam, pickles, packaged coconut water, and tomato puree will now be taxed at 5%, down from their previous rates of 12-18%.
- No Change: Pouch milk remains GST-exempt, with no price changes implemented.
Benefits to Consumers and Farmers
The price reductions are expected to have a positive impact on both consumers and farmers. Manish Bandlish, Managing Director of Mother Dairy, stated that this measure will benefit farmers through increased demand for dairy products. Simultaneously, consumers will enjoy more affordable pricing across the company's product range.
Dairy Industry Impact
This move is likely to have far-reaching effects on the dairy industry. With dairy products moving from the 18% and 12% GST rates to the lowest 5% slab, it's expected to stimulate demand and potentially lead to growth in the sector.
The price revisions by Mother Dairy, a major player in the Indian dairy market, could set a precedent for other companies in the industry to follow suit, potentially leading to broader price reductions across the dairy and processed food sectors.
As consumers begin to see these price reductions reflected on store shelves, it remains to be seen how this will impact consumption patterns and the overall dairy market dynamics in the coming months.
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