Amul to Pass All GST Benefits to Consumers and Farmers: MD Jayen Mehta

India’s largest dairy cooperative, Amul, has announced that it will pass on 100% of the recent GST (Goods and Services Tax) reductions to both consumers and farmers. Managing Director Jayen Mehta emphasized that the cooperative’s unique business model ensures that the benefits of reduced GST will be shared fairly.

“We will definitely increase our share of the consumers’ revenue to the producer in a much larger way, so it benefits both producers and consumers,” said Mehta.

This statement comes at a crucial time when the dairy sector is witnessing double-digit growth and increasing consumer demand for value-added dairy products.

GST Rate Cuts and Their Impact on Amul

Current GST Structure on Dairy Products

Amul Managing Director Jayen Mehta highlighted that half of Amul’s turnover now falls under the zero percent GST category, while the other half is taxed at only 5%.

“Half the products that we do, or half of our turnover, come with 0% GST, and the balance half with just 5% GST,” he explained.

Positive Impact on Farmers and Consumers

According to Mehta, the GST cuts will directly benefit both sides of the supply chain:

• Consumers will enjoy lower prices on essential dairy items.

• Farmers will earn more, as the cooperative increases the share of consumer revenue going back to producers.

He added:

“We have been growing at double digits all through last year and the first five months of this year. We will obviously look at higher double-digit growth now, because this will mean a lower price for the consumers and a sustained demand for the producers.”

Boosting Dairy Consumption in India

Low Per Capita Dairy Consumption: A Growth Opportunity

Mehta pointed out that India’s per capita dairy consumption remains very low, opening a huge market opportunity.

“Only one in 10 Indian consumers eats butter. Only one in 20 eats cheese. So you can imagine that with lower prices and sustained lower prices, we will see this category expanding multiple times,” he said.

Products That Will See Higher Demand

With GST cuts, Amul expects rising demand for:

• Ghee

• Cheese

• Butter

• Ice cream

This surge in demand could transform India’s dairy consumption landscape, making value-added dairy products more accessible to middle-class households.

Strengthening the Organised Dairy Sector

Higher Farmer Payments

On the producer side, Mehta underlined that Amul already pays some of the highest farm-gate prices in the industry:

• Buffalo milk: ₹60–64 per litre

• Cow milk: ₹40–45 per litre

Currently, farmers receive 80–90% of the consumer price, and with the GST cuts, this proportion will rise further.

Fighting Adulteration and Tax Evasion

Mehta explained how lower GST rates will improve transparency in the industry:

“With 5% duty, adulteration will come down, tax evasion will come down. The organised sector will grow, and you will see multiple growth happening in that.”

Amul’s Expansion Plans to Meet Demand

To keep up with the rising demand, Amul is aggressively ramping up its production capacity.

• Capacity has already been tripled in some product segments.

• By the end of the financial year, Amul plans to expand capacity 7–8 times.

Mehta said:

“Good demand is always good for the brands, and when you see stock out, it means it is sold out most of the time. Nobody wants a stockout situation for disappointed customers.”

This expansion underlines Amul’s strategy to stay ahead in India’s fast-growing organised dairy market.

Conclusion

Amul’s decision to pass on GST benefits to both consumers and farmers underscores its commitment to inclusive growth. By making dairy products more affordable and rewarding farmers with better prices, Amul is setting a benchmark in India’s food sector.

The GST cuts will not only increase consumption of value-added dairy products like cheese, butter, ghee, and ice cream but will also boost transparency and reduce tax evasion, strengthening the organised dairy market. With robust expansion plans and growing demand, Amul is well-positioned to continue its double-digit growth trajectory, benefiting millions of farmers and millions more consumers across India.