GST rate and HSN code for ghee and butter
GST on ghee is 5% (HSN 0405) from 22 September 2025, down from 12%. The same entry covers butter, butter oil and dairy spreads, loose or packed. Desi ghee, cow ghee and buffalo ghee are all 0405. Vanaspati is not ghee; it is hydrogenated vegetable fat under 1516, also at 5%.
HSN code and GST rate for ghee and butter
| Condition | HSN | GST | CGST + SGST | IGST | Schedule entry |
|---|---|---|---|---|---|
| Ghee, butter, butter oil, dairy spreads | 0405 | 5% | 2.5% + 2.5% | 5% | Notification 9/2025-CT(Rate), Schedule I, S. No. 7 |
In force from 22 September 2025. Inside your State, half the rate is CGST and half SGST; for a buyer in another State the full rate is IGST (same entries in Notification 9/2025-IT(Rate)). Entry wording (shortened): “Butter and other fats and oils derived from milk, including ghee; dairy spreads”.
What changed in September 2025
| Condition | Before 22 Sep 2025 | From 22 Sep 2025 |
|---|---|---|
| Ghee, butter, butter oil, dairy spreads | 12% | 5% |
Old rate as listed in Annexure I of the PIB release on the 56th GST Council meeting (3 September 2025).
What to print on the bill
- Print HSN 0405 for ghee and butter.
- Loose ghee by weight is also 5%; there is no loose exemption.
- Vanaspati and margarine: use their own headings (1516, 1517).
- HSN digits: 4 if your turnover last year was up to ₹5 crore, 6 above that; up to ₹5 crore you may leave HSN off bills to unregistered buyers (Notification 78/2020-CT). More in B2C bill rules.
Common mistakes
- Keeping ghee at 12% in the billing software after 22 September 2025.
- Treating loose ghee as exempt.
- Billing vanaspati under 0405.
Put the right HSN and GST on every bill
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Questions about GST on ghee and butter
What changed for ghee in September 2025?
Butter, ghee, butter oil and dairy spreads (0405) went from 12% to 5% (PIB, Annexure I).
Is butter taxed like ghee?
Yes. Both are in the same 0405 entry at 5%.
Is loose ghee exempt?
No. The 0405 entry has no packed or loose condition.
More items in HSN chapter 04 and milk and dairy
Look up another item in the HSN and GST rate finder, or see all GST rates by category.
General information, not tax advice. Rates are taken from Notification No. 9/2025-Central Tax (Rate), dated 17 September 2025, as amended, and were last checked on 16 October 2026. The rate depends on the exact description and classification of your product: check it with your CA.