TN: Aavin ends discount on ghee, accused of not passing GST cut
Based on the decision taken at the GST Council meeting on September 3, the Centre had announced GST rate cut on ghee, butter, and cheese to 5 per cent from 12 per cent, while ice-creams were brought down to 5 per cent from 18 per cent. UHT milk and paneer were exempted from GST.
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CHENNAI: Aavin’s decision to withdraw the festival season discount on ghee from December 1 has brought back criticism from milk dealers, who allege that the State-run cooperative is still not reflecting the GST rate cut in product prices.
Based on the decision taken at the GST Council meeting on September 3, the Centre had announced GST rate cut on ghee, butter, and cheese to 5 per cent from 12 per cent, while ice-creams were brought down to 5 per cent from 18 per cent. UHT milk and paneer were exempted from GST.
Though the reduction was to take effect from September 22, the Tamil Nadu Cooperative Milk Producers’ Federation, which markets milk and milk products under the Aavin brand, failed to reduce the rate, alleged milk dealers’ associations, who noted cooperatives across the country and private dairies have revised prices.
Instead, Aavin announced a temporary festival-season discount until October 30, effectively keeping pre-GST prices intact. According to the Tamil Nadu Milk Dealers Employees Welfare Association (TNMDEWA), the discount was used as a substitute for the mandatory GST-linked price reduction.
The controversy escalated after Aavin’s circular dated November 28, directing all district unions and channel partners to withdraw the discount on ghee from December 1 and adopt a revised price chart.
As per the circular, Aavin reinstated its pre-GST-cut retail prices, effectively increasing ghee prices by Rs 40 per litre, Rs 20 per 500 ml, Rs 350 per 5 litres, and Rs 1,155 per 15 kg tin.
Condemning this, association president SA Ponnusamy said, “Aavin first avoided implementing the GST reduction, then masked it as a festival discount. Now it has once again placed an unnecessary financial burden on consumers.”
The association said Aavin’s refusal to reduce prices in accordance with GST norms amounted to disguised tax evasion, and demanded that Aavin immediately restore the reduced rates, issue a proper post-GST price chart, and ensure that the benefit of the GST cut reaches consumers directly.
The association had filed a complaint with the GST headquarters in Chennai on September 24. With the GST Council yet to respond to its complaint, the association said it would intensify its campaign if corrective action was not taken.