GST on food in India is not one rate. It ranges from zero to 40% depending on what the product is, its HSN code, and whether it's sold pre-packaged and labelled. And since 22 September 2025, the entire slab structure is different: the 56th GST Council meeting abolished the 12% and 28% slabs, moved most packaged foods to 5%, and created a 40% demerit rate. Getting this wrong is expensive: incorrect GST on invoices creates compliance risk, and an MRP built on the old tax assumption quietly changes your margins.
| GST Rate | Category | Examples |
|---|---|---|
| 0% | Fresh produce, loose staples, and newly exempted dairy and breads | Fresh fruits, vegetables, eggs, fresh milk, loose rice and dal — plus, since Sept 2025, UHT milk, pre-packaged paneer, and Indian breads (roti, paratha, khakhra) |
| 5% | The default rate for most packaged food | Pre-packaged staples (atta, rice, dal), namkeen and bhujia (down from 12%), biscuits, pasta, noodles and cornflakes (down from 18%), butter, ghee and cheese (down from 12%), sauces, jams, dry fruits, fruit juices, roasted nuts and makhana |
| 18% | Standard rate — mostly non-food goods and services, some residual food preparations | Courier and logistics services, advertising, machinery; a small set of food preparations that didn't move to 5% — check your HSN line |
| 40% | Demerit rate introduced in Sept 2025 | Aerated and carbonated drinks, caffeinated energy drinks, pan masala, tobacco products |
Note that the old "branded vs unbranded" test was replaced in July 2022: the trigger for GST on staples is now whether the product is "pre-packaged and labelled" under the Legal Metrology Act (retail packs up to 25 kg carrying mandatory declarations). A sealed, labelled retail pack attracts GST even without a registered trademark; the same commodity sold loose is typically exempt.
The same GST rate applies to all transactions, but how it's split depends on whether the sale is within a state or across state lines.
Intra-state sale (manufacturer and buyer in the same state): GST splits equally into CGST (Central GST) and SGST (State GST). At 5% total, that's 2.5% CGST + 2.5% SGST.
Inter-state sale (manufacturer and buyer in different states): The entire rate is charged as IGST (Integrated GST). At 5%, the invoice shows 5% IGST.
The net amount the buyer pays is identical. The difference is how ITC flows — IGST credit can be used to offset CGST, SGST, or future IGST, while CGST credit can only offset CGST and IGST, and SGST credit only SGST and IGST. For businesses selling across India, the IGST route for inter-state supplies typically gives more flexibility in ITC utilisation.
HSN (Harmonised System of Nomenclature) codes determine the tax rate. The first four digits matter most for GST classification.
| HSN Code | Category | Typical GST |
|---|---|---|
| 1101–1106 | Flours — wheat, maida, suji, besan, other | 5% (pre-packaged and labelled); loose exempt |
| 1905 | Bread, biscuits, pastry, cakes, wafers, rusks | 0% (plain bread); 5% (biscuits and most others, down from 18%) |
| 2008 | Nuts, peanuts, dried fruits, other prepared food — roasted makhana, trail mixes | 5% |
| 2101 | Extracts, essences of coffee/tea; roasted chicory | 5% |
| 2106 | Food preparations not elsewhere classified — namkeen, protein supplements, certain snacks | 5% for namkeen/bhujia; some preparations remain at 18% — check your line |
| 2202 | Beverages | 40% (aerated/carbonated and caffeinated drinks); fruit pulp-based drinks lower — check notification |
| 2309 | Animal feed preparations | Varies; often 0% for basic cattle feed |
HSN 2106 remains the catch-all many new food products fall into when they don't fit neatly elsewhere — and it's now the trickiest heading, because namkeen-type products under 2106 moved to 5% while some other preparations under the same heading stayed at 18%. If your product sits between 2008 and 2106, get the classification confirmed in writing; the rate difference is meaningful.
If your business is GST registered, you can claim credit for GST paid on inputs — raw materials, primary packaging, secondary packaging, freight (if the transporter is GST registered), and business services. This ITC offsets your GST liability on sales.
You cannot claim ITC on inputs used for exempt supplies. If you sell a mix of GST-applicable and GST-exempt products, ITC must be apportioned accordingly.
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