FM Clarifies: No GST on Milk, Pencils, and Funeral Services in India

NEW DELHI. During the ongoing winter session of Parliament, Finance Minister Nirmala Sitharaman addressed misconceptions regarding the Goods and Services Tax (GST) on essential commodities. Responding to queries in the Lok Sabha, the Finance Minister categorically denied claims that the government is levying taxes on basic necessities such as milk, pencils, and funeral services. She informed the house that these items and services are either outside the ambit of GST or are placed under the 0% tax slab. According to the Minister, it's unfortunate that facts are being misrepresented in the house, leading to confusion among the general public.

GST Status on Milk and Dairy Products

Finance Minister Nirmala Sitharaman clarified that since the implementation of GST on 1 July 2017, 'open milk' has remained entirely tax-free. She stated that no GST is levied on milk, placing it in the zero-percent category. Providing further details on other dairy products, she mentioned that the government has taken significant steps to provide relief to consumers. According to officials, the 56th GST Council meeting held on 3 September 2025 resulted in a major decision to reduce tax rates on products like ghee, butter, and paneer from 12% to 5%. The Minister emphasized that the government's objective is to keep dairy products affordable for the common man.

Taxation Policy for Education and Stationery Items

Addressing claims regarding GST on the education sector, the Finance Minister stated that formal education from pre-school to higher secondary levels is completely exempt from GST, while Also, any education leading to a recognized degree or qualification is also outside the tax net. Regarding stationery items, she clarified that pencils, sharpeners, erasers, exercise books, notebooks, and maps attract 0% GST. However, she noted that premium stationery such as expensive pens, staplers, and markers are taxed as per the prescribed rates, while in the context of the commercialization of education, it was noted that private coaching institutes and non-recognized vocational courses fall under the GST regime.

Healthcare Services and Insurance Sector Updates

Regarding healthcare, the Finance Minister informed that medical treatment, diagnostic tests, and care services have been under the 0% GST slab since 1 July 2017. Services provided by doctors and nurses are tax-free. However, as per regulations, if a hospital room rent exceeds ₹5000 per day (excluding ICU), tax is applicable. Under the 'Next Gen GST Reforms', the government has also decided to move individual health and life insurance plans to the 0% GST slab, making insurance coverage more accessible to citizens. This move is aimed at reducing the financial burden on individuals seeking social security.

Clarification on Funeral Services and Essential Amenities

During the parliamentary debate, when the issue of tax on funeral services was raised, the Finance Minister termed the claims as entirely baseless. She clarified that funeral services have never been subject to GST and remain completely tax-free. She stated that spreading misinformation on such sensitive issues is equivalent to playing with public sentiments, while On top of that, the government clarified that essential goods distributed through the Public Distribution System (PDS) and other basic civic services are also kept free from the burden of GST to ensure the welfare of the marginalized sections of society.

GST Council Functioning and Future Reforms

The Finance Minister informed the house that GST rates are determined by the GST Council, which comprises finance ministers from all states. Any change in rates is made only after the consensus of the states and extensive deliberations. She stated that the government's focus is on making the tax structure more simple and transparent through 'Next Gen GST Reforms'. The Council regularly reviews categories of goods to ensure that the tax burden on essential items remains minimal. The Finance Minister reiterated that the government is working in a transparent manner and urged the public not to pay heed to misleading information regarding fiscal policies.