Mother Dairy Reduces Prices on Dairy Products Following GST Rate Cuts

Updated on: September 16, 2025

In a significant move aimed at benefiting consumers, Mother Dairy has announced a reduction in prices for its milk and various dairy products. This decision comes in response to a recent cut in the Goods and Services Tax (GST) rates, which has been a topic of discussion among policymakers and consumers alike. Effective September 22, 2025, the price adjustments will reflect the new GST rates, which now stand at either 5% or zero for the company’s entire portfolio.

Price Adjustments Across the Board

Mother Dairy, a subsidiary of the National Dairy Development Board, has made it clear that the price cuts are designed to pass on the benefits of the GST rate reduction directly to consumers. The company has stated that one liter of ultra-high-temperature (UHT) milk will now be priced at ₹75, down from ₹77. This reduction is part of a broader strategy to make dairy products more affordable for the average consumer.

The revised pricing structure includes:

• Milkshakes: ₹28 (previously ₹30)
• Paneer (200 gm): ₹92 (previously ₹95)
• Butter (100 gm): ₹58 (previously ₹62)
• Cow Ghee (1 liter): ₹720 (previously ₹750)

Additionally, it is noteworthy that pouch milk remains exempt from GST, providing further savings for consumers. Ice cream prices have also seen a reduction, with costs dropping by up to ₹5 per 100 ml and ₹30 per liter.

For products under the Safal brand, which includes frozen snacks, jams, pickles, and more, the GST has been reduced from 12% to 5%. The new prices for these items are as follows:

• Frozen French Fries (400 gm): ₹95 (previously ₹100)
• Frozen Aloo Tikki (400 gm): ₹85 (previously ₹90)
• Frozen Nuggets (300 gm): ₹110 (previously ₹105)
• Coconut Water (200 ml): ₹50 (previously ₹55)
• Mixed Fruit Jam (500 gm): ₹165 (previously ₹180)

Implications of the GST Rate Cut

The reduction in GST rates is part of a broader initiative by the Indian government to stimulate economic growth and enhance consumer spending. By lowering taxes on essential goods, the government aims to make these products more accessible to the general public. According to Mother Dairy, this GST rate cut is expected to have a positive impact on the entire value chain, from farm to table.

Manish Bandlish, the Managing Director of Mother Dairy, emphasized the importance of these reforms in a recent statement. “GST reforms are a progressive step that will significantly boost consumption and accelerate the adoption of safe, high-quality packaged offerings,” he said. Bandlish further noted that the company is committed to passing on 100% of the benefits to consumers, effective September 22.

Historical Context of GST in India

The introduction of the Goods and Services Tax in India in July 2017 marked a significant shift in the country’s taxation system. Designed to simplify the tax structure and eliminate the cascading effect of multiple taxes, GST has undergone several revisions since its inception. The recent rate cuts reflect ongoing efforts to adapt the tax system to better serve the needs of consumers and businesses alike.

Historically, the dairy sector in India has been a vital component of the economy, contributing significantly to rural livelihoods and food security. The National Dairy Development Board, established in 1965, has played a crucial role in the development of this sector, promoting cooperative dairy farming and ensuring fair prices for both producers and consumers.

Consumer Reactions and Market Impact

The response from consumers has been largely positive, with many expressing appreciation for the price reductions. Lower prices on essential dairy products are expected to ease the financial burden on households, particularly in a time of rising living costs.

Market analysts suggest that this move could also encourage other dairy companies to follow suit, potentially leading to a broader trend of price reductions across the sector. As competition increases, consumers may benefit from more choices and better prices.

Conclusion

Mother Dairy’s decision to reduce prices on its dairy products in light of the recent GST rate cuts is a significant step towards making essential goods more affordable for consumers. With the entire portfolio now attracting a GST of 5% or zero, the company is not only enhancing its consumer-centric approach but also contributing to the larger economic goal of boosting consumption. As the dairy sector continues to evolve, the implications of these changes will likely resonate throughout the market, benefiting both consumers and producers alike.