New Delhi: On Saturday, June 22, the Goods and Services Tax (GST) Council held a meeting where several key decisions were made to provide relief to taxpayers and ease the compliance burden on businesspersons. One significant decision was the reduction of GST on milk cans from 18% to 12%, making the rate uniform across all types of milk cans, whether made of steel, iron, or aluminum.
Despite this positive change, a misleading narrative began circulating on social media, suggesting that the Modi government introduced a new 12% tax on milk cans. This portrayal ignored the fact that the GST rate was actually reduced from 18% to 12%.
Critics of the Modi government shared the news of the 12% GST on milk cans without acknowledging the reduction and the unification of the tax rate for all types of cans. However, some alert users on X (formerly Twitter) clarified that the GST rates on milk cans had indeed been lowered.
Importantly, this 12% GST applies only to the cans themselves, not to the milk purchased by consumers. Despite this, misinformation can spread rapidly, leading to potential misinterpretations, such as claims that the Modi government is taxing milk at 12%. Such claims could even appear in political statements, including those by Rahul Gandhi.
It is crucial to note that GST rates are determined by the GST Council, which includes Finance Ministers from all states, including those governed by opposition parties. Therefore, attributing tax rate decisions solely to the Modi government is misleading. In this instance, the GST Council’s decision actually reduced the tax rates on milk cans, contrary to the false narrative being spread.
While it is true that a large majority, approximately 80%, of Indians do not purchase packaged milk and instead rely on milkmen for their daily milk supply, it is important to note the nuances of GST application in this context. Packaged milk from brands like Amul and Sanchi available in the market are indeed exempt from GST. However, the recent GST adjustment applies specifically to milk cans, which are predominantly used by businesses and not typically purchased by the majority of poor and middle-class households. At the same time, 5 percent GST is levied on Amul's condensed, sweetened or flavored milk.
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