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Selling ghee online in India: licences, GST rate and label rules

Ghee sellers need FSSAI Basic registration (₹100 a year) up to ₹1.5 crore turnover. Ghee (HSN 0405) is taxed at 5% GST from 22 September 2025, down from 12%. FSSAI's standard requires at least 99.5% milk fat, at most 0.5% moisture, and no added flavour, colour or preservative.

7 min read
Spoon lifting a scoop of soft golden ghee from a small glass jar, next to pink roses and white flowers on a grey surface
Spoon lifting a scoop of soft golden ghee from a small glass jar, next to pink roses and white flowers on a grey surface
In this post · 9 sections

Short answer: Ghee sellers need FSSAI Basic registration (₹100 a year) up to ₹1.5 crore turnover. Ghee (HSN 0405) is taxed at 5% GST from 22 September 2025, down from 12%. FSSAI's standard requires at least 99.5% milk fat, at most 0.5% moisture, and no added flavour, colour or preservative.

Rules and rates checked on 24 October 2026. Sources are listed at the end of this page.

Licences and registrations

WhatDo you need it?CostWhere
FSSAI Basic registrationYes, if annual turnover is up to ₹1.5 crore₹100 a yearfoscos.fssai.gov.in
FSSAI Central licence (e-commerce category)Check before launch₹7,500 a yearfoscos.fssai.gov.in
GST registrationYes for any inter-state sale; otherwise above ₹40 lakh turnoverNo fee stated in the sources usedgst.gov.in

FSSAI Basic registration. Making ghee for sale is dairy processing. From 1 April 2026, Basic registration covers turnover up to ₹1.5 crore. Under FSSAI's 2020 eligibility table, dairy units handling up to 500 litres of milk a day (or 2.5 MT of milk solids a year) qualified for registration. Check on FoSCoS whether that capacity test still applies.

FSSAI Central licence (e-commerce category). FSSAI's eligibility table puts 'E-commerce' under Central licensing with no turnover or capacity floor. It does not say whether a small dairy selling only its own ghee on its own website is covered. Ask the licensing authority.

GST registration. Each jar sent to a buyer in another state is an inter-state supply, and section 24(i) requires registration for those at any turnover.

GST rate and HSN code

HSN 0405: Butter and other fats and oils derived from milk, including ghee; dairy spreads. GST rate: 5% (Notification 9/2025-CT(R), Schedule I, S.No. 7). Before 22 September 2025 it was 12%.

Ghee is named in heading 0405, 'Butter and other fats and oils derived from milk, including ghee; dairy spreads', at Schedule I, S.No. 7. That is 2.5% CGST plus 2.5% SGST. The GST Council's food-sector list moved butter, ghee and butter oil from 12% to 5%.

The rate is the same for cow, buffalo and A2 ghee, whether loose or packed. FSSAI's standard defines ghee as derived exclusively from milk or milk products, so a blend with vegetable fat cannot be sold as ghee. Ghee packed only for lamps or puja must carry FSSAI's black cross 'not for human consumption' symbol under the 2020 labelling regulations.

Worked example: one sale at ₹799

Price the buyer pays (GST included)₹799
Taxable value₹760.96
Buyer in your state: CGST + SGST₹19.02 + ₹19.02
Buyer in another state: IGST₹38.04

What the label and product page must show

  • The product must be named 'Ghee' on the front of the pack. That is the name FSSAI's milk fat standard (2.1.8) prescribes.
  • List ingredients. FSSAI's standard says the raw material must be free from added flavour, colour or preservative.
  • Declare 'Milk' as an allergen. The 2020 regulations list milk and milk products as allergens. Show the green vegetarian mark; milk products count as vegetarian.
  • Print the FSSAI logo and registration number, the name and full address of the brand owner, and a batch number.
  • Print the date of manufacture or packing and the expiry or use-by date together; month and year are enough for shelf life over three months.
  • Give nutrition information per 100 g.
  • Show net quantity, MRP inclusive of all taxes, unit sale price and consumer care details as Legal Metrology requires. On the website, show these before payment.

Packing, shipping and listing

FSSAI's standard for ghee (regulation 2.1.8) sets minimum 99.5% milk fat, maximum 0.5% moisture, Butyro-refractometer reading at 40°C of 40.0 to 44.0, Reichert Meissl value of at least 24.0, Polenske value 0.5 to 2.0 and free fatty acids up to 2.0% as oleic acid. A lab test against these numbers is the simplest proof that your ghee is ghee.

AGMARK grade standards for ghee are tighter. They allow at most 0.3% moisture, an RM value of at least 28.0, and free fatty acids of 1.4% (Special), 2.5% (General) or 3.0% (Standard grade).

Ghee goes semi-liquid in warm weather. India Post treats liquids and substances that liquefy easily as needing a double receptacle with absorbent filler. Use a sealed jar or tin inside a second container.

Mistakes to avoid

  • Adding flavour or colour, even a little turmeric for colour. FSSAI's ghee standard says the raw material must be free from added flavour, colour or preservative.
  • Skipping the lab test. Moisture above 0.5% or free fatty acids above 2.0% fails FSSAI's standard even if the ghee tastes fine.
  • Assuming a dairy fits Basic registration on turnover alone. FSSAI's 2020 table also capped dairy units at 500 litres of milk a day for registration. Confirm the current test on FoSCoS.
  • Shipping in a single jar. Ghee can liquefy in transit, and India Post's rules require a double receptacle for such goods.
  • Forgetting the milk allergen line. The 2020 labelling regulations require 'Contains: Milk' for milk and milk products.

On your own Selzix store

You set the HSN code and GST rate on each product, and every order gets a GST invoice with the CGST and SGST or IGST split worked out from the buyer's state. Not sure you need GST at all? Read GST for online sellers in India.

Questions sellers ask

What is the GST on ghee?

5% from 22 September 2025. Ghee is HSN 0405, Schedule I, S.No. 7 of Notification 9/2025-CT(R). It was 12% before that date.

Do I need an FSSAI licence to sell homemade ghee?

You need at least FSSAI Basic registration, which covers turnover up to ₹1.5 crore from 1 April 2026 and costs ₹100 a year. FSSAI's 2020 table also used a milk-handling limit of 500 litres a day for dairy units, so check the current rule on FoSCoS.

What is the FSSAI standard for pure ghee?

At least 99.5% milk fat, at most 0.5% moisture, BR reading 40.0 to 44.0 at 40°C, RM value at least 24.0 and free fatty acids up to 2.0%. It must be made only from milk or milk products with no added flavour, colour or preservative.

Sources

General information, not tax or legal advice. Rules change; check the source before you file or apply. Cover photo: Megumi Nachev on Unsplash.

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