Aavin’s decision to withdraw its festival-season discount on ghee from 1 December 2025 has triggered renewed criticism from milk dealers, who allege that the State-run cooperative has still not passed on the GST rate reduction to consumers.
The controversy dates back to the September 3 GST Council meeting, where the Union government announced a GST rate cut from 12% to 5% on ghee, butter and cheese, and from 18% to 5% on ice cream. UHT milk and paneer were fully exempted from GST. The revised rates officially came into effect on 22 September 2025.
According to milk dealers’ associations, cooperatives across the country and major private dairies revised their price charts soon after the GST cut came into force. However, the Tamil Nadu Cooperative Milk Producers’ Federation (Aavin), responsible for marketing milk and dairy products under the Aavin brand “failed to reduce the rate,” alleged the associations.
Instead of implementing the mandated post-GST price reduction, Aavin announced a temporary festival-season discount, keeping market prices unchanged until 30 October 2025. The Tamil Nadu Milk Dealers Employees Welfare Association (TNMDEWA) said the discount was “used as a substitute for the mandatory GST-linked price reduction.”
Tensions escalated following Aavin’s circular dated 28 November 2025, instructing all district unions and channel partners to withdraw the ghee discount from December 1 and adopt a revised price chart. As per the circular, Aavin restored its pre-GST retail prices, effectively increasing ghee prices by:
- ₹40 per litre
- ₹20 per 500 ml
- ₹350 per 5 litres
- ₹1,155 per 15 kg tin
Condemning this move, association president S.A. 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.”
Dealers said Aavin’s refusal to reflect the GST cut “amounted to disguised tax evasion,” and demanded that the cooperative immediately restore the reduced rates, publish a proper post-GST price chart, and ensure that the benefit of the tax reduction reaches consumers directly.
TNMDEWA had also filed a complaint with the GST headquarters in Chennai on 24 September 2025. With the GST Council yet to respond, the association said it would intensify its campaign if corrective action was not taken soon.
(Source: DTNext)
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