Milk HSN Code

Understanding Milk HSN Codes

Milk, a fundamental part of our diet, comes in various forms, from fresh liquid milk to powdered, concentrated, and fermented products. For businesses in the dairy industry, including farmers, processors, distributors, and retailers, understanding the Harmonized System of Nomenclature (HSN) code and the applicable Goods and Services Tax (GST) rate for milk and milk products is critical for smooth operations and tax compliance. The classification depends heavily on the form, fat content, and processing of the milk.

The Milk HSN Codes

The HSN system categorizes milk and dairy products primarily under Chapter 04, which is dedicated to “Dairy produce; birds eggs; natural honey; edible products of animal origin, not elsewhere specified or included.” Other chapters also come into play for beverages containing milk, milk-based machinery, or specific milk derivatives.

Here’s a breakdown of common HSN classifications for milk and related products:

• Fresh and Pasteurised Milk (HSN 0401): This is the most direct classification for liquid milk.
  • Fresh Milk And Pasteurised Milk, Including Separated Milk, Milk And Cream, Not Concentrated Nor Containing Added Sugar Or Other Sweetening Matter, Excluding Ultra High Temperature (Uht) Milk (HSN 0401): This broad category covers fresh liquid milk, including pasteurized and separated milk, without added sugar or sweetening.
  • Milk And Cream – Fat Content, By Weight, <= 1% (HSN 04011000): Skimmed or low-fat milk.
  • Milk And Cream – Fat Content, By Weight >1% <= 6% (HSN 04012000): Toned or standardized milk with specific fat content.
  • Milk And Cream, Not Concentrated Nor Containing Added Sugar Or Other Sweetening Matter – Of A Fat Content, By Weight, Exceeding 10% (HSN 04015000): High-fat cream.
• Concentrated or Sweetened Milk (HSN 0402):
  • Milk And Cream, Concentrated Or Containing Added Sugar Or Other Sweetening Matter Whole Milk (HSN 04022910): Covers whole milk in concentrated forms, often with added sugar.
  • Milk And Cream, Concentrated Or Containing Added Sugar Or Other Sweetening Matter Other (HSN 04022990): Other concentrated or sweetened milk products not elsewhere specified.
  • Skimmed In Powder, Granules Or Other Solid Forms, Of A Fat Content, By Weight Not Exceeding 1.5% : Skimmed Milk (HSN 04021010): Skimmed milk powder.
• Fermented Milk Products (HSN 0403):
  • Butter Milk, Curdled Milk And Cream, Yogurt, Kephir And Other Fermented Or Acidified Milk And Cream, Whether Or Not Concentrated Or Containing Added Sugar Or Other Sweetening Matter Or Flavoured Or Containing Added Fruit, Nuts Or Cocoa (HSN 0403): This broad category covers fermented milk products.
  • Other Butter Milk (HSN 04039010): Specific to buttermilk.
• Whey and Milk Constituents (HSN 0404):
  • Whey, Whether Or Not Concentrated Or Containing Added Sugar Or Other Sweetening Matter; Products Consisting Of Natural Milk Constituents (HSN 04049000): Covers whey and other natural milk constituents.
• Butter and Dairy Spreads (HSN 0405):
  • Butter And Other Fats And Oils Derived From Milk; Dairy Spreads (HSN 0405): The main heading for butter and similar products.
  • Butter (HSN 04051000): Specific HSN for butter.
  • Other Ghee (HSN 04059020): Specific HSN for ghee.
  • Other (HSN 04059090): Other fats and oils derived from milk, not elsewhere specified.

Beyond Chapter 04, other relevant HSNs include:

• Beverages Containing Milk (HSN 22029030): For prepared beverages where milk is an ingredient.
• Soya Milk Drinks (HSN 22029910): For non-dairy milk alternatives.
• Milk Albumin (HSN 35022000): For milk protein derivatives.
• Milking Machines And Dairy Machinery (Chapter 8434): For equipment used in milk processing.
  • Milking Machines (HSN 84341000).
  • Dairy Machinery (HSN 84342000).
  • Parts : Of Dairy Machinery (HSN 84349020).

Understanding GST Rates for Milk

The GST rates for milk and dairy products in India show a clear distinction based on their processing and form, reflecting government policies to make essential fresh milk accessible.

• Nil GST Rate (0%):
  • Fresh Milk And Pasteurised Milk, Including Separated Milk, Milk And Cream, Not Concentrated Nor Containing Added Sugar Or Other Sweetening Matter, Excluding Ultra High Temperature (Uht) Milk (HSN 0401): This is a crucial point for consumers and dairy farmers; unpackaged fresh milk, including pasteurized, is exempt from GST.
  • Buttermilk, Curdled Milk And Cream, Yogurt, Kephir And Other Fermented Or Acidified Milk And Cream, Whether Or Not Concentrated Or Containing Added Sugar Or Other Sweetening Matter Or Flavoured Or Containing Added Fruit, Nuts Or Cocoa (HSN 0403): Unpackaged fermented milk products are also exempt.
• 5% GST Rate:
  • Milk And Cream – Fat Content, By Weight, <= 1% (HSN 04011000): Packaged low-fat milk.
  • Milk And Cream – Fat Content, By Weight >1% <= 6% (HSN 04012000): Packaged toned/standardized milk.
  • Milk And Cream, Not Concentrated Nor Containing Added Sugar Or Other Sweetening Matter – Of A Fat Content, By Weight, Exceeding 10% (HSN 04015000): Packaged high-fat cream.
  • Milk And Cream, Concentrated Or Containing Added Sugar Or Other Sweetening Matter (HSN 04022910, 04022990): This includes condensed milk.
  • Skimmed Milk Powder (HSN 04021010).
  • Whey, Whether Or Not Concentrated Or Containing Added Sugar Or Other Sweetening Matter (HSN 04049000).
  • Other Butter Milk (HSN 04039010): Packaged buttermilk.
• 12% GST Rate:
  • Butter And Other Fats And Oils Derived From Milk; Dairy Spreads (HSN 0405, 04051000, 04059020, 04059090): This includes butter and ghee.
  • Soya Milk Drinks (HSN 22029910).
• 18% GST Rate:
  • Milk Albumin (HSN 35022000).
  • Milking Machines And Dairy Machinery (HSN 84341000, 84342000, 84349020).
• 28% GST Rate:
  • Beverages Containing Milk (HSN 22029030): This refers to highly processed or sweetened milk-based beverages, often sold as flavored drinks.

All these GST rates became effective from July 1, 2017, the day GST was implemented in India.