Packaged milk prices surge by 25 per cent

ISLAMABAD: Leading dairy companies in Pakistan have announced significant price hike for packaged milk after the federal government imposed an 18 percent general sales tax (GST) in the Budget 2024-25.

The National Assembly approved the budget in late June, implementing the 18 percent GST on packaged milk, along with herbal and homeopathic medicines, and food items.

The new taxation has led to a 25 per cent increase in the prices of packaged milk, raising the cost by Rs. 75 per liter. A liter of milk that previously cost Rs. 295 now retails for Rs. 370.

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This sharp increase in packaged milk prices is attributed to the combined effects of the new GST and an additional 2.5 per cent tax on retailers.

Dairy companies have cited economic pressures and rising production costs as primary reasons for the price hikes. The new prices took effect from July 1, 2024, impacting the cost of various milk pack sizes.

The updated prices are as follows:

250ml Pack: The price has increased to Rs. 95 for retail customers, with a carton box now priced at Rs. 2,660.

1000ml Pack: Each pack is now priced at Rs. 370, with the carton box rate rising to Rs. 4,440 for retail customers.

1500ml Pack: The price per pack has surged to Rs. 535, while the carton box rate stands at  Rs4,200, 

The recent move was aimed to increase cost of living for many Pakistanis, especially low-income families who depend on these essential items.

The new taxes were approved despite requests from dairy industry representatives and other stakeholders who urged government to reconsider general sales tax.