It is true, unprocessed cow’s milk is subject to GST. And yet once it has been processed in any way, it will become GST free.
This is because at the “raw” stage, before processing, the milk is not considered to be food “fit for human consumption” and is excluded from the definition of “food”. But once it becomes a product that is deemed to food for human consumption, it is GST free under Section 38-4 of the GST act exemptions provisions for food.
Similarly, live animal sales are subject to GST, but once the animal has been killed and inspected by an authorised person as fit for human consumption, the meat becomes GST free food.
Just to keep things interesting, goat and sheep milk is GST free, whether it has been processed or not.
Edited at 19 Jan 2017 06:30 AM GMT