The Goods and Services Tax (GST) in India has a significant impact on various sectors, including the food industry. Understanding the GST rates applicable to different food items is crucial for businesses and consumers alike. In this blog post, we will explore the GST rates on food items in 2025, provide detailed explanations, and include examples to illustrate the impact.
GST Rates on Food Items
The GST rates on food items are categorized into different slabs to ensure that essential items are taxed at lower rates while luxury items attract higher taxes. Here are the GST rates applicable to various food items in 2025, along with their Harmonized System of Nomenclature (HSN) codes:
- 0% GST (Exempted Items):
- Fresh fruits and vegetables (HSN Code: 0701 to 0714)
- Unprocessed cereals and pulses (HSN Code: 1001 to 1008)
- Milk and dairy products (excluding branded and packaged products) (HSN Code: 0401 to 0406)
- Eggs (HSN Code: 0407)
- Fresh meat and fish (HSN Code: 0201 to 0208)
- 5% GST:
- Branded and packaged cereals and pulses (HSN Code: 1001 to 1008)
- Edible oils (HSN Code: 1507 to 1516)
- Tea, coffee, and sugar (HSN Code: 0902, 0901, 1701)
- Frozen vegetables (HSN Code: 0710)
- Fortified rice kernel (FRK) (HSN Code: 1006)
- 12% GST:
- Processed food items (e.g., packaged snacks, ready-to-eat meals) (HSN Code: 1904, 2106)
- Bakery products (e.g., cakes, pastries) (HSN Code: 1905)
- Fruit juices and beverages (HSN Code: 2009)
- 18% GST:
- Chocolates and confectionery (HSN Code: 1806)
- Ice cream (HSN Code: 2105)
- Packaged drinking water (HSN Code: 2201)
- Instant food mixes (HSN Code: 2106)
- 28% GST:
- Luxury food items (e.g., high-end chocolates, gourmet foods) (HSN Code: 1806)
- Aerated drinks and sodas (HSN Code: 2202)
GST on Restaurant and Hotel Food
The GST rates on food served in restaurants and hotels vary based on the type of establishment and the room tariff of the hotel. Here are the details:
- Standalone Restaurants:
- GST Rate: 5% without Input Tax Credit (ITC)
- This rate applies to standalone restaurants, including those offering takeaway and food delivery services.
- Restaurants within Hotels:
- If the room tariff is less than ₹7,500 per night:
- GST Rate: 5% without ITC
- If the room tariff is ₹7,500 or more per night:
- GST Rate: 18% with ITC
- If the room tariff is less than ₹7,500 per night:
- Outdoor Catering Services:
- GST Rate: 18% with ITC
These rates ensure that the tax burden is aligned with the type of service and the value of the accommodation provided by the hotel.
Examples of GST on Restaurant and Hotel Food
To illustrate the impact of GST on restaurant and hotel food, let’s look at some examples:
- Standalone Restaurant:
- A meal at a standalone restaurant costing ₹1,000 will attract a 5% GST, making the total cost ₹1,050.
- Restaurant in a Hotel (Room Tariff < ₹7,500):
- A meal costing ₹1,000 in a hotel where the room tariff is ₹6,000 per night will attract a 5% GST, making the total cost ₹1,050.
- Restaurant in a Hotel (Room Tariff ≥ ₹7,500):
- A meal costing ₹1,000 in a hotel where the room tariff is ₹8,000 per night will attract an 18% GST, making the total cost ₹1,180.
- Outdoor Catering:
- An outdoor catering service costing ₹10,000 will attract an 18% GST, making the total cost ₹11,800.
Impact on Consumers and Businesses
The tiered GST rates on food items aim to balance revenue generation for the government while minimizing the tax burden on essential items for consumers. Here are some key impacts:
- Affordability: Essential food items like fresh fruits, vegetables, and milk are exempt from GST, ensuring they remain affordable for consumers.
- Cost of Processed Foods: Processed and packaged foods attract higher GST rates, which can increase their cost for consumers. Businesses in the food processing industry need to account for these taxes in their pricing strategies.
- Luxury Items: Luxury food items and aerated drinks attract the highest GST rates, making them more expensive. This can influence consumer choices and demand for these products.
FAQ Section on GST on Food Items
Fresh fruits and vegetables are exempt from GST in 2025, meaning they attract a 0% GST rate.
Branded and packaged cereals and pulses attract a 5% GST rate.
Processed food items, including packaged snacks and ready-to-eat meals, fall under the 12% GST slab.
Yes, chocolates and confectionery items are subject to an 18% GST rate.
1.Standalone restaurants: 5% GST without Input Tax Credit (ITC).
2.Restaurants within hotels (room tariff < ₹7,500 per night): 5% GST without ITC.
3.Restaurants within hotels (room tariff ≥ ₹7,500 per night): 18% GST with ITC.
4.Outdoor catering services: 18% GST with ITC.
Conclusion
Understanding the GST rates on food items is essential for both consumers and businesses. The tiered approach to GST ensures that essential items are taxed at lower rates, while luxury items attract higher taxes. Staying informed about these rates and their implications can help consumers make better purchasing decisions and businesses plan their pricing strategies effectively.
For more detailed information on the latest GST updates and their implications, you can refer to the official notifications and guidelines issued by the GST Council.
