GST on Packaged Food in India — Rates, HSN Codes, and What Gets Classified Where

GST on food in India is not one rate. It ranges from zero to 28% depending on what the product is, whether it's branded, what the HSN code is, and sometimes how it's packaged. Getting this wrong is expensive: incorrect GST on invoices creates compliance risk, and mispriced MRP built on the wrong tax assumption can quietly kill your margins.

These rates reflect commonly published GST Council notifications and are for reference. GST rates are revised periodically. Confirm the applicable rate for your specific product and HSN classification with a registered CA or GST practitioner before filing or invoicing.

The slab structure for food

GST Rate	Category	Examples
0%	Unbranded and loose staples; fresh produce	Fresh fruits, vegetables, eggs, fresh milk, loose rice, loose dal, unbranded atta sold loose (not in sealed branded pack)
5%	Branded packaged staples in sealed containers with registered trademark	Branded atta, maida, suji, rice, dal, besan in retail packs; curd, lassi, buttermilk in sealed containers; branded honey; edible oils (some)
12%	Processed and semi-processed food; most snacks	Namkeen, bhujia, mixtures, roasted/fried snacks, dry fruits, nuts (processed), biscuits, bread (packaged), ghee, butter, cheese
18%	Higher-processed food and some beverages	Corn flakes and other ready-to-eat breakfast cereals, some food preparations under HSN 2106, packaged drinking water (above 20L — smaller packs at 12%)
28%	Aerated and carbonated beverages	Aerated drinks, carbonated water with sugar, pan masala, chewing gum

The "branded" distinction is important. Under GST law, a product sold under a registered trademark in a sealed container is treated as branded and attracts the applicable rate. If you've filed for trademark registration but it isn't granted yet, the position depends on whether you're actually using the mark in commerce — consult your CA.

CGST and SGST vs. IGST

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 12% total, that's 6% CGST + 6% SGST.

Inter-state sale (manufacturer and buyer in different states): The entire rate is charged as IGST (Integrated GST). At 12%, the invoice shows 12% 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 codes for common packaged food

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% (branded, sealed)
1901	Malt extract, food preparations of flour — includes some baby foods, health drinks	18%
1905	Bread, biscuits, pastry, cakes, wafers, rusks	12% (biscuits, others)
2008	Nuts, peanuts, dried fruits, other prepared food — roasted makhana, trail mixes	12%
2101	Extracts, essences of coffee/tea; roasted chicory	12%
2106	Food preparations not elsewhere classified — protein supplements, nutritional powders, certain snacks	18%
2202	Water and other non-alcoholic beverages	12% (packaged water <20L); 18% (>20L, larger dispensers)
2309	Animal feed preparations	Varies; often 0% for basic cattle feed

HSN 2106 is a common catch-all that many new food products fall into when they don't fit neatly elsewhere. Products under 2106 often attract 18% GST — a meaningful difference if you had assumed 12%. If your product could be classified under 2008 (12%) or 2106 (18%), getting the classification right saves money and avoids a compliance headache later.

Input Tax Credit

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.

Common mistakes to avoid

Using 5% for a product that should be 12%. Namkeen and snacks are a consistent source of misclassification — founders sometimes assume staple-adjacent products are at the 5% rate when they're at 12%.
Not updating for GST Council amendments. GST rates on food have been revised multiple times. What was correct in 2020 may not be correct now.
Treating intra-state and inter-state the same in accounting. If your software isn't correctly routing IGST vs. CGST/SGST, your ITC utilisation will be incorrect.
Not separating the GST component when calculating margin. On a ₹100 MRP product at 12%, only ₹89.29 is your taxable value. Treating ₹100 as your base overstates revenue and understates your actual rate.

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