What parameters are CFOs
focusing on to avoid GST scrutiny? What parameters are CFOs focusing on to avoid GST scrutiny?

GST on Rice, Wheat, Cereals and Flour explained

Updated on: Jan 20th, 2025

1 min read

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

Latest Updates
21st December, 2024
In its 55th meeting, the GST Council has recommended to reduce the GST rate on Fortified Rice Kernel (FRK), classifiable under 1904, to 5% from 18% currently.*
*The same would be given effect through the relevant circulars/ notifications.

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

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%
1002	Rye	0	5%
1003	Barley	0	5%
1004	Oats	0	5%
1005	Maize (Corn)	0	5%
1006	Rice, Rice in husk, Husked (brown) Rice, Rice, parboiled, Basmati rice, broken rice, and puffed rice	0	5%
1007	Grain Sorghum	0	5%

Frequently Asked Questions

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.

About the Author

Annapoorna

Assistant Manager - Content

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

BROWSE BY TOPICS

Income Tax e-Filing

Income Tax Slabs FY 2023-24

How To File ITR

Which ITR Should I File?

Last Date To File ITR For 2023-24

Old vs New Tax Regime