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GST on Rice, Wheat, Cereals and Flour explained

Updated on :  

08 min read.

GST on rice was earlier exempt as there was no GST on branded or unbranded specified goods. From July 18th, 2022, the exemption on the branded commodities has been lifted, and now GST is leviable on pre-packaged and labelled commodities.

Taxation of rice, wheat, cereals and flours under GST

Cereals’ treatment under GST The cereal category’s goods are specified in Chapter 10 of the HSN code. All the goods mentioned in Chapter 10 of the HSN code are exempt from GST. Below is the list of items mentioned in Chapter 10 of the HSN code:

  • Wheat and meslin
  • Rye
  • Barley
  • Oats
  • Maize (Corn)
  • Rice
  • Grain sorghum
  • Buckwheat, millet and canary seeds
  • Other cereals

Tax-exempt goods, as listed above, shouldn’t be put up in any unit container and bearing the name of a registered brand. However, these are subject to 5% tax when “prepackaged and labelled” as per Section 2(l) of the Legal Metrology Act and its Rules.

A “pre-packaged commodity” as per the law has all the following characteristics-

  • No purchaser is present or not pre-ordered
  • Packed with or without seal 
  • Based on recommended standard packages of specified weights or measures quantity as per the Legal Metrology Act. The predetermined quantity are packets of 100 grams, 200 grams, 500 grams, 1 kg, 2 kg or 5 kg and multiples of 5 kg.

For example, a package of rice containing 50 kg wouldn’t be considered labelled and a pre-packaged commodity for levying GST. Suppose a rice miller sells rice packages which contain 20 kg of rice but doesn’t make the declaration as required under the Metrology Act and the rules and provisions contained thereunder. Such a package will be considered a labelled and pre-packaged commodity and liable to pay GST on rice.

HSN code and GST rate on rice and wheat, cereals

Edit
HSN CodeDescriptionGST Rate
Other than pre-packaged and labelledPre-packaged and labelled
Chapter 10All goods i.e. cereals, put up in unit container and bearing a registered brand name, as detailed below-05%
1001, 1008, 1101, 1102, 1109Wheat and meslin, wheat flour and meslin flour, buckwheat, millet, canary seeds, ragi, quinoa, jawar, bajra, wheat gluten, and bran05%
1103Cereal groats, meal and pellets, including suji and dalia pre-packaged and labelledNA5%
1002Rye05%
1003Barley05%
1004Oats05%
1005Maize (Corn)05%
1006Rice, Rice in husk, Husked (brown) Rice, Rice, parboiled, Basmati rice, broken rice, and puffed rice05%
1007Grain Sorghum05%

FAQs on GST on rice and wheat 

What is GST on puffed rice?

As discussed earlier, before July 18th, 2022, GST wasn’t levied on specified branded or unbranded goods. From July 18th, 2022, this provision underwent a change and GST was made applicable to the supply of labelled and pre-packaged goods bringing the provisions of the Legal Metrology Act into purview. For instance, puffed rice when pre-packaged and labelled would attract 5% GST from July 18th, 2022. However, no GST would be levied on puffed rice if sold loose.

Why there is GST on rice in India?

The prices of essential goods rose by 5% due to GST on rice and wheat and other edible commodities as per the decision by the Indian Government. Even non-branded items will now be charged GST at a rate of 5% if they are packaged and labelled. Respond to all the queries on how much GST on food, the rate is 5% if sold packaged and labelled. 

What is GST on rice notification?  

As per the recommendation of the GST Council, the Indian Government has issued notifications to this effect to bring GST on rice and wheat and other essential commodities under the 5% GST bracket from July 18. The decision of the Indian government via notification No. 6/2022-Central Tax (Rate), dated July 13th 2022, GST on rice and wheat and other specified commodities will be levied at the rate of 5% if they’re sold in packaged containers. GST on rice may increase the price of rice by Rs. 3/kg to Rs. 5/kg.