Lassi Exempt from GST, AAR Gujarat

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The AAR Gujarat has a new update for Lassi Businesses. The update is that Lassi is exempt from GST. AAR(Authority for Advance Ruling) Gujarat clearly states that Lassi is exempt from GST when a Valsad-based manufacturer and supplier of the product approached it for the applicable GST rate. In this article, we will understand this update in detail.

Query on GST Rates applicable for Lassi 

Recently, a Vaisad-based manufacturer and supplier – Sampoorna Dairy and Agrotech approached the AAR Gujarat. The reason for approaching the AAR was that the organization wanted to know about the GST Rates applicable on Lassi.

The firm in question, Sampoorna Dairy and Agrotech distributes lassi in four flavourings under the ‘Elan’ brand name.

As per the ruling, GST Rates for Lassi is nil but GST is applicable on flavoured milk. Thus, Sampoorna Dairy wanted clarity as the primary ingredients in the lassi being sold were – curd, water, and spices.

Moreover, The bottle displayed the ingredients – pasteurized toned milk, spices, pudina, green chili, ginger, salts, active culture, added nature-identical flavour, and stabiliser.

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Lassi Exempt from GST, AAR Gujarat

To clarify the doubts of Sampoorna Dairy, the AAR Gujarat states that Lassi is exempt from GST. The reason is Curds, lassi, and buttermilk are subject to a particular tax-exempt category (HSN 040390).

On the other hand, flavoured milk comes under different HSN Code. The HSN Code for flavoured milk is 22029930 and it attracts a GST rate of 12 percent.

In the case of Amul, the Gujarat AAR itself had concluded that a 12 percent GST rate applies on producing and supplying flavoured milk (made of sugar added milk, flavouring authorized).

In conclusion, curds, lassi, and buttermilk are classified under – HSN 040390 and free from GST for the producer and the customer. Lassi and flavoured Milk are dairy beverages but they are different in GST categorization codes. Hence, different GST rates are applicable on both these dairy products.

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