GST on Food Items in India
Food items in India attract Nil GST when fresh and unbranded, and 5% GST when packaged, branded or processed. Aerated and caffeinated drinks attract 40% under the demerit rate.
Working out the GST on food items
Food has no single rate, and the calculator below uses 5% — the rate for most packaged and branded food. Fresh, loose and unbranded staples are Nil and aerated drinks are 40%, so identify the category first. Multiply the taxable value by 5 percent to get the GST, then add it to the base price for the total.
- For an intra-state sale, the 5% splits into 2.5% CGST and 2.5% SGST.
- For an inter-state sale, a single 5% IGST applies instead.
- The calculator on this page is pre-set to the 5% rate and handles both cases.
A worked example
Suppose a packaged food order has a taxable value of ₹1,000 before tax. Applying 5% GST works out as follows.
Food GST depends on packaging, not just the food
The single most important rule in food GST is that the same item can be Nil-rated or taxable depending on how it is sold. Loose, fresh and unbranded staples are exempt; the moment they are pre-packaged and labelled under a brand, they become taxable. GST 2.0 abolished the 12% slab and moved nearly all processed food down to 5%. The table covers the main categories.
| Category | Example | GST rate |
|---|---|---|
| Fresh unbranded produce | Loose vegetables, fruit, unpacked grain | Nil |
| Packaged branded staples | Branded atta, rice, pulses | 5% |
| Dairy basics | Fresh milk, curd (unbranded) | Nil |
| Processed & packaged food | Biscuits, namkeen, sauces, pasta | 5% |
| Aerated & caffeinated drinks | Soft drinks, energy drinks | 40% |
The branding and packaging line
Sell rice loose from a sack and it is Nil-rated. Pre-package that same rice, put a registered brand on it, and it attracts 5%. The trigger is a pre-packaged and labelled unit intended for retail sale carrying a brand on which an actionable claim is available. This is why a local mill selling unbranded atta charges nothing while a supermarket brand charges 5% on the identical product. For a small food business, this distinction can decide whether you need to register at all.
The GST 2.0 changes for food
The reform moved most of the old 12% food category down to 5%, meaning packaged snacks, sauces, pasta, jams and similar processed items got cheaper. A second group went further and dropped to Nil: UHT milk, pre-packaged and labelled paneer and chhena, and every Indian bread — chapati, roti, paratha, parotta — along with pizza bread and khakhra. Paneer is the one to watch, because pre-packaged paneer was specifically brought into tax at 5% in July 2022 and a great many rate lists still show that figure. At the same time a 40% demerit rate was introduced for aerated and caffeinated beverages, replacing the old 28% plus cess. So the reform pushed everyday food down, took several staples to zero, and pushed sugary drinks up.
Food sold in a restaurant is taxed differently
This page covers food as goods. Food prepared and served by a restaurant is a service, taxed at 5% without input tax credit, which is a separate scheme with its own rules. A packaged item sold alongside a meal, such as a sealed soft drink, keeps its own goods rate rather than the restaurant rate. Alcohol sits outside GST entirely and is taxed under state excise.
Common items and where they land
The Nil-versus-5% line produces some counterintuitive results worth knowing before you price a product.
| Item | Condition | GST rate |
|---|---|---|
| Milk, curd, lassi | Fresh, unbranded | Nil |
| Paneer, chhena | Pre-packaged & labelled | Nil (since 22 Sep 2025) |
| UHT milk | Any pack | Nil (since 22 Sep 2025) |
| Indian breads — roti, chapati, paratha, parotta | Any | Nil (since 22 Sep 2025) |
| Bread, pizza bread, khakhra | Plain | Nil |
| Dry fruits, nuts | Packaged | 5% |
| Sweets (mithai) | Packaged | 5% |
| Tea, coffee | Packaged, not instant | 5% |
Registration and the composition scheme
A food trader dealing only in Nil-rated goods such as loose grain and fresh produce may not need to register at all, since the turnover is exempt. Once you sell packaged branded items you are making taxable supplies and the ₹40 lakh goods threshold applies (₹20 lakh in special category states). Selling through an e-commerce operator generally requires registration from the first sale. A small food business under ₹1.5 crore can opt for the composition scheme and pay a flat rate on turnover, giving up input tax credit in exchange for lighter compliance.
Mixed baskets and gift hampers
A hamper combining items at different rates is treated as a mixed supply, and the whole thing is taxed at the highest rate of any item in it. Put a 40% aerated drink into a basket of 5% snacks and the entire hamper can attract 40%. This catches gift retailers around festivals. The fix is to invoice items separately where they are genuinely separable rather than selling a single bundled SKU.
Frequently asked questions
It depends on how the food is sold. Fresh, loose and unbranded produce and staples are Nil-rated. Packaged and branded staples and most processed food attract 5%. Aerated and caffeinated drinks attract 40%.
The trigger is pre-packaging and labelling under a brand. Loose unbranded staples sold from a sack are Nil-rated, but the same product pre-packaged and branded for retail sale attracts 5% GST.
Yes. The 12% slab was abolished and nearly all processed and packaged food moved down to 5%, making items like biscuits, namkeen, sauces and pasta cheaper. A new 40% demerit rate was introduced for aerated and caffeinated drinks.
Aerated and caffeinated beverages attract 40% GST under the demerit rate introduced by GST 2.0, replacing the earlier 28% plus compensation cess.
No. Restaurant food is a service taxed at 5% without input tax credit, a separate scheme. A sealed packaged item sold alongside a meal keeps its own goods rate rather than the restaurant rate.