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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.
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:
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-
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
|HSN Code||Description||GST Rate|
|Other than pre-packaged and labelled||Pre-packaged and labelled|
|Chapter 10||All goods i.e. cereals, put up in unit container and bearing a registered brand name, as detailed below-||0||5%|
|1001, 1008, 1101, 1102, 1109||Wheat and meslin, wheat flour and meslin flour, buckwheat, millet, canary seeds, ragi, quinoa, jawar, bajra, wheat gluten, and bran||0||5%|
|1103||Cereal groats, meal and pellets, including suji and dalia pre-packaged and labelled||NA||5%|
|1006||Rice, Rice in husk, Husked (brown) Rice, Rice, parboiled, Basmati rice, broken rice, and puffed rice||0||5%|
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.
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.
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.