The federal government is considering a significant reduction in Goods and Services Tax (GST) on dairy products and is supporting the demand for regulated sale of only pasteurized and packaged milk across the country, a move aimed at formalizing and supporting the economic sector.
These suggestions were at the top of the discussion during a meeting between Federal Minister for Commerce Jam Kamal Khan and a delegation from the Pakistan Dairy Association (PDA) led by its CEO Dr. Shahzad Amin today. The meeting was also attended by Prime Minister’s Coordinator for Commerce Rana Ehsan Afzal.
The PDA delegation highlighted that the current 18 percent GST on dairy goods is substantially higher than regional and global norms, where such products often benefit from zero or minimal taxation.
In response, Minister Jam Kamal Khan instructed the association to submit a formal proposal to lower the GST from 18 percent to 10 percent. He tasked Rana Ihsaan Afzal with spearheading the effort to work closely with the PDA to prepare a comprehensive plan.
The commerce minister also affirmed he would write to the chief ministers and all relevant ministries to ensure coordinated support for implementing the reforms and improving the formalisation of the dairy industry across the country.
Further recommendations from the association included the implementation of regulatory measures to ensure only pasteurised or properly packaged milk is sold to consumers. They also suggested initiating pilot programmes in major urban centres to help transition farmers into formal business practices.
Minister Jam Kamal Khan stressed that enhancing the genetic quality of dairy breeds and guiding farmers towards a structured business model is critical for development. He noted that without proper genetic direction and education, farmers cannot achieve desired milk yields.
The association also emphasised the need for greater financial support, improved banking facilities for farmers, and the establishment of cross-breeding programmes and training to enhance milk production.
Mr. Khan welcomed the proposals, underscoring the necessity of a detailed plan for timely implementation to ensure the dairy sector achieves higher productivity, better regulatory compliance, and becomes a more effective contributor to the nation”s economy.