Aavin offers festival discount; activists raise questions over GST 2.0 changes

Aavin on Monday, the day on which the Goods and Services Tax (GST) 2.0 came into effect, said it would sell butter at ₹275 per half kg, the lowest price among all private brands and cooperatives. Coupled with a reduction in the GST rates, the milk major had also included a festival discount on ghee. The price of 1 litre of ghee has been brought down from ₹690 to ₹650. Similarly, paneer was available at ₹110 per 200 g, it said.

On the reduction of ₹3 per litre of milk by the State government from 2021, Aavin said the intervention had saved ₹1,073 crore for consumers cumulatively so far. A total of 1.5 crore consumers have benefited from this. The prices of various milk-based items are fixed in such a manner that they are not unnecessarily inconvenienced by frequent rate changes due to fluctuations in the market, Aavin said in a statement in the evening.

It added that around 4 lakh farmers had benefited from the provision of incentive of ₹3 per litre of milk. This came to ₹635 crore.

Consumer activists, however, said a circular from Aavin on social media said the milk major was only offering a discount to its customers.

‘No clarity’

S.A. Ponnusamy of the Tamil Nadu Milk Dealers, Employees Welfare Association, said Aavin did not seem to be passing on the benefits to customers. “There is no clarity as to what amount is the GST reduction, which is the base rate, and what is the festival discount. The discount, as the circular says, will only be on till the end of November, after which Aavin can and will increase prices,” he said, calling upon the Central government and the GST Council to look into the matter.

Consumer activist T. Sadagopan pointed out that both Amul and Nandini, cooperatives similar to Aavin, had brought out clear charts explaining the difference in price due to the GST cut. “It is high time that Aavin is removed from the clutches of the political masters and handed over to dairy farmers to run it by themselves,” he added.

An industry watcher said while Amul procured over 3 crore litres of milk a day, Nandini procured over 1 crore litres. Aavin was barely managing 30 lakh litres of milk per day, and this was despite having facilities to process 40 lakh litres per day.