GST on Food in India: What’s Taxable and What’s Not

Food is one of life’s essentials—but when it comes to taxes, not all food items are treated equally. In India, the Goods and Services Tax (GST) applies differently based on the type of food, whether it’s packaged or fresh, and where it’s consumed. In this blog, we’ll break down GST on food items, explain the applicable rates and HSN codes, and help you understand what you’re really paying for.

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    GST Rates

    GST on Food: Overview

    Food products in India fall under multiple GST slabs—0%, 5%, 12%, and 18%, depending on factors like processing, branding, packaging, and point of sale (retail vs restaurant).

    Food Type GST Rate
    Unpackaged, unbranded staples (like wheat, rice) 0%
    Packaged & branded food (like branded flour, rice) 5%
    Processed & preserved foods 12%
    Restaurant food (non-AC) 5%
    Restaurant food (AC) / takeaway 5%
    Luxury food items (chocolates, frozen pizza) 18%

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    HSN Codes for Food Items

    HSN (Harmonized System of Nomenclature) codes help classify food items under GST.

    Food Category Common HSN Code GST Rate
    Rice, Wheat, Pulses 1006, 1001 0% / 5%
    Flour, Besan, Maida 1101, 1106 0% / 5%
    Dairy (Milk, Curd, Butter) 0401 – 0405 0% / 5% / 12%
    Frozen Food, Ready-to-eat 1604, 2106 12% / 18%
    Sweets & Bakery Items 1704, 1905 5% / 18%
    Chocolates & Candy 1806 18%

    Note: Items without branding or packaging generally fall under 0% or 5% tax.

    GST on Packaged vs Unpackaged Food

    The biggest difference in food taxation lies in whether it is packaged and branded or not.

    • Unpackaged and unbranded food: 0% GST
    • Packaged and branded food: 5% GST

    Example:

    Loose atta = 0% GST

    Branded atta in sealed pack = 5% GST

    This rule aims to keep basic foods affordable while still taxing processed or commercial-grade items.

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    GST on Restaurant Food

    Restaurant services are treated differently under GST.

    Restaurant Type GST Rate
    Non-AC Restaurants 5% (No ITC)
    AC Restaurants & Takeaway Services 5% (No ITC)
    Outdoor Catering Services 18% (With ITC)

    ITC = Input Tax Credit (claimable by businesses only)

    Even if you order food online via Swiggy or Zomato, GST is charged at 5% on the bill. The delivery fee may attract 18% GST separately.

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    What About Sweets and Bakery Items?

    • Plain bread (unbranded) = 0%
    • Branded bakery items (cake, muffins) = 5%
    • Biscuits (packaged) = 18%
    • Chocolates = 18%

    If you buy sweets from a sweet shop that also sells meals, GST on sweets is 5%, while restaurant-prepared items (like thali or chaat) are taxed at 5% or 18% depending on the setting.

    Impact on Consumers

    The GST system aims to strike a balance:

    • Basic food items are tax-free, benefiting lower-income groups.
    • Processed and luxury foods carry higher GST, as they are considered non-essential.
    • Restaurant food is uniformly taxed, but without input credits to avoid cascading tax.

    This helps simplify compliance and pricing across India.

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    Unique Features of BUSY Accounting Software for the Food Industry

    • Track food inventory batch-wise with manufacturing, MRP, and expiry dates.
    • Set alerts for expiry stock to avoid wastage.
    • Define multiple units of measurement for food items and packaging.
    • Generate detailed sales reports by item, time slot, or counter.
    • Transfer stock across branches and monitor movement.
    • Set role-based access for billing staff, and managers.
    • Print barcodes and QR codes for packaged food items.

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    Final Thoughts

    The GST on food in India is designed to keep essentials affordable while taxing luxuries and commercial services. Whether you’re buying groceries or dining out, understanding how GST works ensures you’re aware of what you’re paying for. For businesses, it also helps in accurate pricing and compliance.

    Frequently Asked Questions (FAQs)

    • Are fruits and vegetables taxed under GST?
      No. Fresh fruits and vegetables are exempt from GST.
    • What is the GST on milk?
      Milk is exempt from GST if unflavored and unbranded. Flavored or condensed milk may attract 5% or 12%.
    • Is GST charged when I buy groceries online?
      Yes, packaged or branded grocery items attract GST (usually 5%). Unbranded staples may be exempt.
    • Do food delivery apps charge GST?
      Yes, 5% GST is included in the bill. Delivery charges may have 18% GST.
    • What GST rate applies to sweets bought from a sweet shop?
      Generally 5%, but if they are sold in an AC dine-in setup or as restaurant food, it could be 18%.
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