New GST for Bakery Products: Tax on Cakes, Bread, and Confectionery
Quick Summary
- Unbranded fresh bread is GST-free, but branded or packaged bread is taxed at 5%.
- Cakes, pastries, biscuits, and most branded bakery items are taxed at 18% GST.
- Sweet bakery items like barfi and rolls are taxed at either 5% or 18%, depending on previous rates.
- Bakery businesses can claim Input Tax Credit on raw materials, packaging, equipment, and services if registered under GST.
- Small bakeries with turnover below ₹20 lakh are exempt from GST unless they sell branded or packaged products.
If you’re running a bakery, managing a confectionery business, or simply buying bread, cakes, and cookies, it’s important to know how these products are taxed under GST . Unlike packaged food with uniform rates, bakery items attract different GST slabs depending on their type, branding, and whether they’re fresh or preserved.
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New GST Rate on Bakery Products in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for common bakery items (no compensation cess).
Key takeaway: 12% is no longer a standard slab; such items generally move to 5%. Many 28% items move to 18%; a small demerit/luxury set sits at 40%. Exemptions continue where applicable.
HSN Code and New GST Rate on Bakery Products
| Bakery Product | HSN Code | New GST Rate | Remarks |
|---|---|---|---|
| Unbranded fresh bread | 1905 | 0% | GST exempt if not branded or packaged |
| Branded or packaged bread | 1905 | 5% | Branded/labelled products are taxed |
| Cakes (fresh or pre-packed) | 1905 | 18% | Applies to birthday cakes, plum cakes, etc. |
| Pastries and muffins | 1905 | 18% | Includes chocolate or cream-filled items |
| Biscuits and cookies | 1905 | 18% | Branded snack-type biscuits |
| Sweet bakery items (barfi, rolls) | 1904 or 2106 | 5% or 18% | 5% where earlier 12% applied; 18% otherwise |
Note: Rows that previously referenced a 12% slab are updated to 5%. Exemptions remain unchanged; no compensation cess applies unless specifically notified.
Are Bakery Products Taxable Under GST?
Yes. Most bakery items—whether freshly baked or packaged—are taxable under GST. However, the tax rate varies from nil to 18% depending on the item. They fall under HSN codes in HSN Chapter 19 (bread, cakes, pastries) and Chapter 21 (food preparations).
Old GST Rate on Bakery Products in India
(Old GST Rates – Applicable Until 21st September)
| Bakery Product | HSN Code | GST Rate | Remarks |
|---|---|---|---|
| Unbranded fresh bread | 1905 | 0% | GST exempt if not branded or packaged |
| Branded or packaged bread | 1905 | 5% | Branded/labelled products are taxed |
| Cakes (fresh or pre-packed) | 1905 | 18% | Applies to birthday cakes, plum cakes, etc. |
| Pastries and muffins | 1905 | 18% | Includes chocolate or cream-filled items |
| Biscuits and cookies | 1905 | 18% | Branded snack-type biscuits |
| Sweet bakery items (barfi, rolls) | 1904 or 2106 | 12% or 18% | Based on ingredients & packaging |
Note: Rows that previously referenced a 12% slab are updated to 5%. Exemptions remain unchanged; no compensation cess applies unless specifically notified.
GST Rate on Cakes and Pastries
All prepared cakes and pastries are taxed at 18%, even if sold by small bakeries or online platforms like Zomato or Swiggy.
GST on Bread and Loaves
Unbranded bread remains GST-free, but if it’s branded or sweetened, a GST charge applies. Flavored or processed breads may fall under higher slabs.
GST on Confectionery and Packaged Bakery Items
Cookies, branded chocolates, packaged muffins, Swiss rolls, and similar items attract 18% GST, especially if they’re preserved and labelled.
Input Tax Credit (ITC) for Bakery Businesses
Bakery businesses can claim Input Tax Credit on:
- Raw materials (flour, sugar, cream, chocolate)
- Packaging materials
- Bakery equipment
- Utilities and rent
- Marketing or delivery services
Only GST-registered businesses are eligible to claim ITC on inputs taxed at 5%, 12%, or 18%.
Understanding the gst for bakery products is essential for both small businesses and large food retailers. Whether you bake at home, run a neighborhood cake shop, or operate an online bakery, applying the right GST rate ensures pricing transparency and tax compliance.
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