Case: Dodla Dairy Limited v. The Additional Commissioner State Tax and Appellate Authority & Others
Court: High Court of Andhra Pradesh, Amaravati
Petition No.: W.P. No. 5699 of 2025
Date of Judgment: 19 March 2025
Category of Dispute: Classification of Goods – Flavoured Milk and Conversion Charges
Relevant Sections: Section 9 of CGST Act, Section 11 of IGST Act, and relevant entries under Chapter 4 and 22 of GST Tariff
Facts (Paras 1–3)
Dodla Dairy Ltd., a registered dealer under GST engaged in milk and milk products, was assessed for FY 2017–18 by the State Tax Department. The assessing officer classified flavoured milk under Tariff Heading 2202 (beverages) instead of 0402 (milk and cream) and taxed conversion of milk into milk powder at 18%.
The assessee’s appeal before the appellate authority was dismissed on 16 December 2024. Since the GST Tribunal was not yet constituted, the assessee filed this writ petition challenging both orders.
Questions Before Court (Paras 3–5)
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Whether flavoured milk is classifiable under Chapter 0402 (as milk) or 2202 (as beverage).
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Whether conversion charges for processing milk into milk powder are taxable at 18% or 5%.
Observations (Paras 4–5)
The Court noted that its earlier Division Bench judgment in W.P. No. 254/2024 (dated 10 December 2024) had categorically held that flavoured milk is classifiable under 0402 and not 2202, treating it as a dairy product and not an aerated beverage.
Regarding conversion charges, the Court observed that for subsequent periods (2019–2020) the appellate authority had already accepted the petitioner’s argument that conversion services attract 5% GST, not 18%.
Judgment (Para 6)
The Court disposed of the writ petition as follows:
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Assessment and appellate orders (dated 09 March 2021 and 16 December 2024) were set aside.
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The case was remanded to the assessing officer to pass a fresh order, treating flavoured milk under Tariff Heading 0402.
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The rate on conversion charges for milk-to-milk-powder is left open for fresh determination, keeping in view prior appellate acceptance of 5%.
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No order as to costs.
Summary of Cases Referred
| Case No. | Citation | Issue | Verdict |
|---|---|---|---|
| W.P. No. 254 of 2024 | High Court of Andhra Pradesh (10 Dec 2024) | Classification of flavoured milk | Held classifiable under Heading 0402 (milk and cream), not 2202 (beverages) |
Between Fine Lines (Practical Takeaway)
The judgment reiterates the judicial consensus that flavoured milk remains a dairy product and not a beverage, thereby attracting the lower GST rate under Chapter 0402. For processors, conversion of milk into milk powder must be carefully examined under the job work or manufacturing lens to determine appropriate GST rate—potentially 5%. The ruling emphasizes uniform tariff treatment for dairy manufacturers and protects them from arbitrary reclassification.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
