GST Rate for Food Items in India: Updated List and Categories

Understanding the GST rate for food items is essential for households, retailers, manufacturers, restaurants, and food service businesses in India. Food is a daily necessity, and even a small change in tax rates directly impacts consumer prices and business margins. With the introduction of GST 2.0 reforms effective from September 22, 2025, the Goods and Services Tax framework has been significantly rationalized to make taxation simpler, more transparent, and consumer-friendly.

This article offers a clear and updated explanation of GST on food items, covering essential groceries, packaged foods, processed food products, bakery items, dairy products, and restaurant food. It also explains exempt food items and higher tax luxury food categories, helping you stay informed and compliant.

Overview of GST Rate for Food Items in India

The GST rates in India are applied based on the nature of the food item, whether it is fresh, unbranded, pre-packaged, processed, or served through restaurants. Under the revised structure, most food items fall into four broad categories:

• Nil (0%) GST for essential, unprocessed foods
• 5% GST for packaged and processed essentials
• 18% GST for branded, premium, and restaurant food
• 40% GST for sin goods and luxury consumables

This structure ensures affordability for daily necessities while generating revenue from non-essential and high-end products.

GST Exempt Food Items (0% GST)

GST-exempt food items include basic and essential products that are consumed daily across Indian households. These items attract nil GST, meaning no tax is levied at any stage of supply.

Examples of food items under 0% GST include:

• Fresh milk, curd, lassi, buttermilk, paneer (unbranded)
• Unbranded rice, wheat, flour, pulses, cereals, and millets
• Fresh vegetables and fruits
• Fresh fish, meat, poultry, and eggs
• Unpackaged honey, coconut, and coconut water
• Unbranded dry fruits and edible oils
• Bread, roti, chapati, khakhra, and similar staple foods

The rationale behind this exemption is straightforward: these are essential food items that form the backbone of everyday nutrition, and taxing them would directly burden common consumers.

For grocery sellers and Kirana stores dealing mainly in exempt supplies, proper classification is still important. TMWala can help businesses correctly identify exempt goods and avoid errors during GST registration and return filing.

GST On Packaged and Processed Food Products (5% GST)

With changing consumer habits, packaged foods and ready-to-use products have become increasingly common. GST on packaged food and GST on processed food are generally levied at 5%, provided the items are pre-packaged and labelled.

Food items taxed at 5% GST include:

• Pre-packaged paneer, butter, ghee, cheese, and dairy spreads
• Packaged flour, rice, cereals, and pulses
• Pasta, noodles, macaroni, vermicelli, and instant foods
• Packaged namkeens, bhujia, mixtures, and savoury snacks
• Sauces, chutneys, jams, jellies, and condiments
• Bakery products like packaged bread, rusks, biscuits, and cakes
• Packaged dry fruits and nuts
• Ice cream and frozen desserts (non-luxury category)

This slab balances affordability with revenue generation. While consumers pay a small tax, businesses benefit from input tax credit eligibility, making supply chains more efficient.

For manufacturers and traders dealing with packaged goods, accurate invoicing and compliance are crucial. TMWala can help with GST compliance, classification, and return filing to ensure smooth operations.

GST On Dairy Products

GST on dairy products depends on whether the product is fresh or processed. While fresh milk remains exempt, value-added dairy items attract tax.

• Fresh milk (pasteurised or UHT): 0% GST
• Curd, lassi, paneer (unbranded): 0% GST
• Butter, ghee, cheese, flavoured milk, condensed milk: 5% GST

The government has deliberately kept dairy taxation low to protect nutritional affordability, while allowing limited taxation on processed dairy to support revenue needs.

GST On Bakery Items

GST on bakery items varies based on branding and processing:

• Unbranded, local bakery products: generally, 5% GST
• Packaged and branded bakery goods: 5% to 18% GST depending on product type
• Premium cakes, pastries, and desserts sold under registered brands: up to 18% GST

Small bakeries must carefully assess whether their products qualify as branded or unbranded to determine the correct tax rate.

GST On Grocery Items

The GST on grocery items largely depends on packaging and branding:

• Loose groceries sold without packaging: 0% GST
• Pre-packaged groceries with labels: 5% GST
• Premium or branded grocery items: up to 18% GST

Retailers must pay special attention to compliance, especially when shifting from loose sales to packaged formats.

GST On Restaurant Food

GST on restaurant food differs from grocery or packaged food taxation because it is treated as a service supply.

Current structure includes:

• 5% GST on non-AC restaurants and takeaway services (without input tax credit)
• 18% GST on AC restaurants, premium dining, and hotels above prescribed tariffs (with input tax credit)

Luxury dining experiences attract higher tax due to the service element and infrastructure costs involved.

Restaurant owners must stay compliant with service GST rules, billing formats, and return timelines. TMWala can help restaurants manage GST registration, filing, and compliance efficiently.

| Also Read an article about the GST on Restaurants Bill.

High-Tax Food Categories (18% TO 40% GST)

Certain food products are considered non-essential or harmful and attract higher GST rates.

Items taxed at 18% GST include:

• Chocolates and cocoa-based products
• Frozen pizzas and ready-to-eat meals
• Branded sauces and premium packaged foods

Items taxed at 40% GST include:

• Aerated soft drinks
• Sweetened and caffeinated beverages
• Pan masala and tobacco-related consumables

These rates discourage excessive consumption while contributing significantly to government revenue.

Quick Reference: GST Rate in India List for Food Items

• 0% GST: Fresh fruits, vegetables, grains, milk, eggs, unbranded staples
• 5% GST: Packaged groceries, dairy products, bakery items, processed foods
• 18% GST: Branded processed foods, restaurant dining, premium bakery items
• 40% GST: Soft drinks, tobacco, and sin goods

This GST rate in India list helps businesses and consumers quickly identify applicable tax slabs.

Importance of GST Compliance for Food Businesses

Correct application of GST on food products is not just about taxation but also about avoiding penalties, ensuring smooth audits, and maintaining credibility. Misclassification of food items is one of the most common reasons for GST notices.

Professional assistance can simplify compliance, especially after the major reforms introduced in 2025.

Conclusion

The revised GST rate on food items reflects a well-balanced approach that protects consumers while supporting economic growth. Essential foods remain tax-free, processed and packaged foods are taxed moderately, and luxury or harmful consumables attract higher GST.

Whether you are a grocery trader, food manufacturer, restaurant owner, or consumer, understanding GST on food items, GST on processed food, GST on packaged food, and GST on restaurant food is critical in 2025 and beyond. Staying informed ensures compliance, transparency, and better financial planning in India’s evolving tax landscape.

FAQs

1. What is the GST rate on basic food items in India?
   Essential, unprocessed food items attract 0% GST.
2. Which food items are exempt from GST?
   Fresh fruits, vegetables, milk, grains, eggs, and unbranded staples are GST-exempt.
3. What is the GST on packaged food products?
   Most pre-packaged and labelled food items attract 5% GST.
4. Is GST applicable to processed food?
   Yes, processed foods generally fall under the 5% GST slab.
5. What is the GST rate on dairy products?
   Fresh milk is 0% GST, while butter, ghee, and cheese attract 5% GST.
6. How much GST is charged on bakery items?
   Unbranded bakery items are usually 5% GST, while premium branded items may attract up to 18% GST.
7. What is the GST on grocery items?
   Loose groceries are 0% GST, packaged groceries are 5% GST, and premium branded items may attract 18% GST.
8. What is the GST rate on restaurant food?
   Restaurant food attracts 5% GST (without ITC) or 18% GST for premium dining.
9. Which food items attract high GST rates?
   Chocolates, frozen foods, and premium packaged foods attract 18% GST, while soft drinks attract 40% GST.
10. Why is GST compliance important for food businesses?
    Correct GST classification helps avoid penalties, audits, and compliance issues.