The Goods and Services Tax (GST) in India has been a significant factor in shaping the country’s economy since its introduction in 2017. GST rates on food items vary based on whether they are pre-packaged, processed, or served in restaurants. Here’s a breakdown of GST rates on various food categories:
GST Rates on Food Items
- 0% GST Rate:
- Fresh fruits and vegetables
- Unpackaged paneer
- Fresh milk
- Eggs in the shell
- Unpacked foodgrains like wheat and rice
- Non-container dried leguminous vegetables
- 5% GST Rate:
- Pre-packaged and labelled wheat, rice, maize, and makhana
- Curd, lassi, buttermilk, and paneer (pre-packed and labelled)
- Honey
- Puffed rice (muri)
- Dried leguminous vegetables (packed)
- Salted popcorn (if not pre-packaged)
- Rosogolla (Bengali sweet)
- Mishti/Mithai (Indian sweets)
- Cashew nuts
- 12% GST Rate:
- Processed foods
- Fruit juice
- Preparations of vegetables, nuts, and fruits
- Packed coconut water
- Butter
- Ghee
- Almonds
- 18% GST Rate:
- All sugar confectionery, other than a few specified items
- Caramelized popcorn
- Tinned can of rosogolla
- Traditional achaar (pickle)
- Murabba
- Bakery items (as per tax authorities’ classification)
- Pasta
- Ice-cream
Factors Influencing GST Rates
Packaging and Labelling: GST rates often depend on whether food items are pre-packaged and labelled. Unpackaged items generally attract lower or no GST.
Restaurant Services: GST rates for food services vary based on the type of establishment. For example, air-conditioned restaurants and those with higher tariffs attract an 18% GST rate, while non-air-conditioned ones are taxed at 5%.
Preparation and Ingredients: The method of preparation and ingredients used can significantly affect GST rates. For instance, caramelizing popcorn increases its GST rate.
Conclusion
GST rates on food items in India are structured to balance consumer needs with revenue generation. Understanding these rates is crucial for both businesses and consumers to ensure compliance and manage expenses effectively.
