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.
GST Rate on Bakery Products
| Bakery Product | HSN Code | GST Rate (After 22 Sep 2025) |
GST Rate (Before 22 Sep 2025) |
Remarks |
|---|---|---|---|---|
| Unbranded fresh bread | 1905 | 0% | 0% | GST exempt if not branded or packaged |
| Branded or packaged bread | 1905 | 5% | 5% | Branded or labelled bread is taxable |
| Cakes (fresh or pre-packed) | 1905 | 18% | 18% | Includes birthday cakes, plum cakes |
| Pastries and muffins | 1905 | 18% | 18% | Cream-filled or chocolate pastries |
| Biscuits and cookies | 1905 | 18% | 18% | Branded snack-type biscuits |
| Sweet bakery items (barfi, rolls) | 1904 / 2106 | 5% or 18% | 12% or 18% | 12% slab shifted to 5% |
Note: Products previously taxed at 12% are now generally taxed at 5%. Existing exemptions remain unchanged.
(After 22 Sep 2025) 0%
(Before 22 Sep 2025) 0%
(After 22 Sep 2025) 5%
(Before 22 Sep 2025) 5%
(After 22 Sep 2025) 18%
(Before 22 Sep 2025) 18%
(After 22 Sep 2025) 18%
(Before 22 Sep 2025) 18%
(After 22 Sep 2025) 18%
(Before 22 Sep 2025) 18%
(After 22 Sep 2025) 5% or 18%
(Before 22 Sep 2025) 12% or 18%
Are Bakery Products Taxable Under GST?
Yes. Most bakery items are taxable under GST, with rates varying by product category.
Bakery products typically fall under:
- HSN Chapter 19 – Bread, cakes, pastries, biscuits
- HSN Chapter 21 – Food preparations such as sweet bakery items
Depending on whether the product is fresh, packaged, branded, or preserved, the GST rate may be 0%, 5%, or 18%.
GST Rate on Cakes and Pastries
Prepared cakes and pastries are generally taxed at 18% GST. This applies whether the items are sold by:
- Local bakeries
- Retail stores
- Online food platforms like delivery apps
The tax applies to fresh cakes, cream cakes, pastries, muffins, and similar bakery desserts.
GST on Bread and Loaves
Basic unbranded fresh bread is exempt from GST. However, GST applies when bread is:
- Branded
- Packaged and labelled
- Flavoured or processed
In such cases, bread is generally taxed at 5% GST.
GST on Confectionery and Packaged Bakery Items
Packaged bakery snacks are usually taxed at 18% GST, especially when they are preserved, branded, and sold in retail packaging.
such as:
- Cookies and biscuits
- Packaged muffins
- Swiss rolls
- Branded confectionery bakery items
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% or 18%.
How to Calculate GST on Bakery Products
Calculating GST on bakery products depends on the type of product and its applicable GST rate. In India, bakery items usually fall under 0%, 5%, or 18% GST slabs, depending on whether the product is unbranded, packaged, or processed.
You can calculate GST on bakery products using this simple formula:
GST Amount = (Product Price × GST Rate) ÷ 100
Final Price = Product Price + GST Amount
Example 1: GST on Cakes (18%)
Suppose a bakery sells a birthday cake for ₹1,000.
- GST Rate = 18%
- GST Amount = ₹1,000 × 18% = ₹180
Final price including GST = ₹1,180
Example 2: GST on Packaged Bread (5%)
Suppose the price of packaged bread is ₹40.
- GST Rate = 5%
- GST Amount = ₹40 × 5% = ₹2
Final price including GST = ₹42
Example 3: GST on Unbranded Fresh Bread (0%)
If a bakery sells unbranded fresh bread for ₹30:
- GST Rate = 0%
- GST Amount = ₹0
Final price = ₹30
Conclusion
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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