NewKerala.com

Key Points

The government has introduced major GST reforms aimed at making essential food items more affordable for consumers. Tax rates on packaged foods, juices, and snacks have been reduced to just 5%, while staple breads like roti and paratha are now fully exempt. These changes also benefit the logistics sector with lower taxes on trucks and packaging materials. Overall, the reforms simplify compliance for businesses while strengthening India's food security and economic competitiveness.

Key Points: GST Reforms Cut Food and Logistics Taxes to 5% for Consumer Relief

  • GST on trucks and goods vehicles reduced from 28% to 18% to lower freight rates
  • Essential Indian breads like roti and paratha fully exempted from GST
  • Packaging materials like crates and paper now taxed at just 5 percent
  • Most packaged foods and snacks moved to 5% tax slab to boost demand
3 min read

GST reforms in food processing and logistics sectors to empower consumers, industry

Government slashes GST on essential foods, packaging, and trucks to 5% or nil, boosting affordability and supply chain efficiency while simplifying industry compliance.

"“Reduction of GST on food items to 5 per cent or nil benefits not only consumers but every stakeholder” – Government"

New Delhi, Sep 15

The GST reforms in the food processing and logistics sectors will ensure affordability for consumers, predictability for industry players and competitiveness for India’s economy, the government said on Monday.

By reducing rates on essential food items, packaging materials, and transport vehicles, the government has not only simplified taxation but also laid a strong foundation for sustainable growth in food processing, logistics, and allied industries.

Food items like ultra-high temperature (UHT) milk, paneer/chena, breads like paratha/parotta, khakhra, chapati/roti and pizza bread have been exempted from GST. The indirect taxes on packaged food/snacks, chocolates, sauces, juices, coffee, etc. have been reduced to 5 per cent, boosting demand and industry growth.

Packaging materials like crates and paper are now taxed at 5 per cent, lowering logistics and production costs. GST on trucks and goods vehicles have been cut from 28 per cent to 18 per cent, reducing freight rates and strengthening supply chains, said the government.

The government has aimed to simplify taxation in the food processing industry by bringing most food items under the 5 per cent or nil tax slab.

This framework promotes uniformity, transparency, and ease of compliance for businesses, while reducing the scope for disputes as certain confusion arose due to classification issues, where products with similar ingredients were placed under different tax slabs. This often led to disputes, litigation, and uncertainty for both industry and consumers.

At the same time, it also provides price relief to consumers, as seen in the exemption of staple Indian breads like Paratha, Parotta, and Roti from GST, reflecting their status as essential household foods.

The government ensures food security primarily through the National Food Security Act (NFSA), which entitles up to 75 per cent of the rural population and 50 per cent of the urban population to receive highly subsidised food grains via the Targeted Public Distribution System.

The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) continues to strengthen this coverage by providing free food grains to over 81.35 crore beneficiaries (as of June 27, 2025), with the scheme extended for five years from January 2024.

Additionally, the government uses initiatives like the Price Stabilisation Fund and subsidised sale of staples such as Bharat Dal and Bharat Rice to control price volatility and make essential food items affordable.

“Reduction of GST on food items to 5 per cent or nil benefits not only consumers but every stakeholder in the food processing value chain — from farmers and cooperatives to MSMEs, retailers, and exporters,” according to the government.

—IANS

- IANS

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Reader Comments

R
Rohit P
As someone in logistics, the GST reduction on trucks from 28% to 18% is a game-changer. This will significantly reduce transportation costs and make Indian goods more competitive.
A
Arjun K
Good move but implementation is key. Hope these benefits actually reach consumers and aren't absorbed by companies as extra profit. Need strict monitoring!
S
Sarah B
The classification simplification is much needed. Earlier, similar food products had different tax rates causing confusion. This rationalization will help businesses plan better.
Karthik V
Reducing GST on packaging materials to 5% will help small food processors like us. Lower costs mean we can compete better with big brands. 🇮🇳
M
Meera T
While these reforms are welcome, the government should also focus on improving cold chain infrastructure. Reduced taxes help, but proper storage facilities are equally important for food security.

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