Supreme Court Upholds 5% GST on Badam-Flavoured Milk
By Author / May 10, 2025
Supreme Court | GST Case Update
Background of the Case
The Supreme Court dismissed an appeal filed by the Revenue Department against an Andhra Pradesh High Court ruling. The case involved Sri Vijaya Visakha Milk Producers Company Ltd, which classified badam-flavoured milk under HSN code 0402 9990, attracting 5% GST.
Earlier, the Madras High Court, in the case of Parle Agro, also held that flavoured milk falls under the same classification and is subject to 5% GST.
Current GST Rates on Dairy Products
- Fresh and pasteurised milk: Fully exempt
- Curd, lassi, buttermilk, paneer (sold loose): Exempt
- Curd, lassi, buttermilk, paneer (pre-packaged and labelled): 5% GST
- UHT milk: 5% GST
- Condensed milk, butter, ghee, cheese, flavoured milk: 12% GST (as per general classification)
Key Observations from Andhra Pradesh High Court
- Badam-flavoured milk was not considered a beverage, but rather a type of milk.
- Entry 0402 under GST includes milk, cream, baby milk food, and milk with sweeteners.
- Flavoured milk with minor additives (like 0.5% badam flavour) still qualifies under Entry 0402.
The court ruled that the tax department’s view, which limited Entry 0402 to only plain milk, was incorrect.
Implications for the Industry
Tax experts believe the Supreme Court’s ruling provides clarity and supports a 5% GST rate for flavoured milk. However, the GST Council may still need to formally update the rate notification to avoid disputes and ensure alignment with this judgment.
A tax consultant stated, “The classification is clear now, but businesses should wait for a formal notification to ensure compliance.”
