Nandini ghee jumps Rs 90 to Rs 700 despite GST cut: Here’s why

Bangalore: Consumers will now have to pay Rs 700 per litre for Nandini ghee after the Karnataka Milk Federation (KMF) announced a sudden Rs 90 price hike, even though a recent GST cut had earlier lowered the product’s price.

The cooperative explained that rising global commodity prices and supply constraints left it with no choice but to revise rates.

“Even globally, demand is pushing prices up. Our ghee rates remain among the lowest, and this revision is necessary to align with global market trends and maintain economic viability,” said KMF officials.

Earlier this year, Nandini ghee prices had dropped from Rs 640 to Rs 610 per litre following the Centre’s GST reduction on dairy products from 12% to 5%. Despite the tax relief, the sudden increase has surprised consumers.

Bamul Chairman DK Suresh highlighted the financial pressures faced by cooperative societies: “We produce around 95 lakh to 1 crore litres of milk daily but sell only about 50 lakh litres. While the government provides Rs 4 per litre incentive for these 50 lakh litres, we still purchase the remaining milk at Rs 4 per litre, leading to losses,” according to a report by India Today. 

He added that a shortage of ghee and butter across the country has also contributed to the price surge. “Our prices were already the lowest, and even after the revision, they remain below other brands selling for Rs 700–900. We ensure 100% quality at every stage — from milk collection to ghee production,” Suresh said.

GST Cuts on Dairy Products

The GST reduction on dairy products effective September 22 had lowered taxes on:

UHT Milk: 5% → 0%

Paneer: 12% → 0%

Butter, Ghee, Cheese, and other dairy fats: 12% → 5%

Milk cans (Iron, Steel, Aluminium): 12% → 5%

Plant-based milk (excluding soya milk): 18% → 5%

Despite the GST relief, KMF says that global price pressures, supply constraints, and operational costs necessitated the Rs 90 hike, keeping Nandini ghee competitive yet financially viable.