GST Rate for Food & Agriculture Sector

The recent revision of GST rates is a game-changer for several sectors, especially food and agriculture — two pillars that support not only the economy but also everyday life. With the government’s aim to simplify compliance and reduce costs for essential goods, the new rates offer both relief and strategic opportunities for businesses and consumers alike. From everyday staples like milk and bread to agricultural equipment like tractors and irrigation systems, these changes are set to redefine pricing, production strategies, and supply chains across industries.

In this blog, we’ll explore how the updated GST rates impact the food and agriculture sectors, highlighting areas of opportunity, challenges, and what this means for businesses and consumers moving forward.

(5% To Nil)

S. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
1.	0401	Ultra-High Temperature (UHT) milk
2.	0406	Chena or paneer, pre-packaged and labelled
3.	1905	Pizza bread
4.	1905 or 2106	Khakhra, chapathi or roti

(18% to Nil)

S. No.

Chapter / Heading /
Sub-heading / Tariff item

Description of Goods

2106

Paratha, parotta and other Indian breads by any name called

(12% to 5%)

S. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
1.	0402 91 10, 0402 99 20	Condensed milk
2.	0405	Butter and other fats (i.e. ghee, butter oil, etc.) and oils derived from milk; dairy spreads
3.	0406	Cheese
4.	0801	Brazil nuts, dried, whether or not Shelled or Peeled
5.	0802	Other nuts, dried, whether or not shelled or peeled, such as Almonds, Hazelnuts or filberts (Corylus spp.), Chestnuts (Castanea spp.), Pistachos, Macadamia nuts, Kola nuts (Cola spp.), Pine nuts [other than dried areca nuts]
S. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
6.	0804	Dates (soft or hard), figs, pineapples, avocados, guavas, mangoes (other than mangoes sliced, dried) and mangosteens, dried
7.	0805	Citrus fruit, such as Oranges, Mandarins (including tangerines and satsumas); clementines, wilkings and similar citrus hybrids, Grapefruit, including pomelos, Lemons (Citrus limon, Citrus limonum) and limes (Citrus aurantifolia, Citrus latifolia), dried
8.	0813	Fruit, dried, other than that of headings 0801 to 0806; mixtures of nuts or dried fruits of Chapter 8 [other than dried tamarind]
9.	1108	Starches; inulin
10.	1501	Pig fats (including lard) and poultry fat, other than that of heading 0209 or 1503
11.	1502	Fats of bovine animals, sheep or goats, other than those of heading 1503
12.	1503	Lard stearin, lard oil, oleo stearin, oleo-oil and tallow oil, not emulsified or mixed or otherwise prepared
13.	1504	Fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not chemically modified
14.	1505	Wool grease and fatty substances derived therefrom (including lanolin)
15.	1506	Other animal fats and oils and their fractions, whether or not refined, but not chemically modified
16.	1516	Animal or microbial fats and animal or microbial oils and their fractions, partly or wholly hydrogenated, inter- esterified, re-esterified or elaidinised, whether or not refined, but not further prepared
17.	1517	Edible mixtures or preparations of animal fats or microbial fats or animal oils or microbial oils or of fractions of different animal fats or microbial fats or animal oils or microbial oils of this Chapter, other than edible fats or oils or their fractions of heading 1516
18.	1518	Animal or microbial fats and animal or microbial oils and their fractions, boiled, oxidised, dehydrated, sulphurised, blown, polymerised by heat in vacuum or in inert gas or otherwise chemically modified, excluding those of heading 1516; inedible mixtures or preparations of animal, vegetable or microbial fats or oils or of fractions of different fats or oils of this chapter, not elsewhere specified of included
S. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
19.	1601	Sausages and similar products, of meat, meat offal, blood or insects; food preparations based on these products
20.	1602	Other prepared or preserved meat, meat offal, blood or insects
21.	1603	Extracts and juices of meat, fish or crustaceans, molluscs or other aquatic invertebrates
22.	1604	Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs
23.	1605	Crustaceans, molluscs and other aquatic invertebrates prepared or preserved
24.	1701 91, 1701 99	All goods, including refined sugar containing added flavouring or colouring matter, sugar cubes (other than those which attract 5% or nil GST)
25.	1704	Sugar boiled confectionery
26.	1902	Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli, cannelloni; couscous, whether or not prepared
27.	1905 90 30	Extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion)
28.	2001	Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic acid
29.	2002	Tomatoes prepared or preserved otherwise than by vinegar or acetic acid
30.	2003	Mushrooms and truffles, prepared or preserved otherwise than by vinegar or acetic acid
31.	2004	Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than products of heading 2006
32.	2005	Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading 2006
33.	2006	Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glacé or crystallised)
34.	2007	Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, obtained by cooking, whether or not containing added sugar or other sweetening matter
35.	2008	Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or
S. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
		included; such as Ground-nuts, Cashew nut, roasted, salted or roasted and salted, Other roasted nuts and seeds, squash of Mango, Lemon, Orange, Pineapple or other fruits
36.	2009	Fruit or nut juices (including grape must) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter
37.	2009 89 90	Tender coconut water, pre-packaged and labelled
38.	2101 30	Roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof
39.	2102	Yeasts (active and inactive); other single cell micro- organisms, dead (but not including vaccines of heading 3002); prepared baking powders
40.	2103	All goods, including Sauces and preparations therefor, mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard, Curry paste, mayonnaise and salad dressings
41.	2106	Texturised vegetable proteins (soya bari), Bari made of pulses including mungodi and batters
42.	2106 90	Namkeens, bhujia, mixture, chabena and similar edible preparations ready for consumption form (other than roasted gram), pre-packaged and labelled
43.	2106 90 91	Diabetic foods
44.	2201	Drinking water packed in 20 litre bottles
45.	2202 99 10	Soya milk drinks
46.	2202 99 20	Fruit pulp or fruit juice based drinks [other than Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice]
47.	2202 99 30	Beverages containing milk

(18% to 5%)

S. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
1.	1107	Malt, whether or not roasted
2.	1302	Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners,
		whether or not modified, derived from vegetable products [other than tamarind kernel powder]
3.	1517 10	All goods i.e. Margarine, Linoxyn
4.	1520 00 00	Glycerol, crude; glycerol waters and glycerol lyes
5.	1521	Vegetable waxes (other than triglycerides), Beeswax, other insect waxes and spermaceti, whether or not refined or coloured
6.	1522	Degras, residues resulting from the treatment of fatty substances or animal or vegetable waxes
7.	1702	Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form; sugar syrups not containing added flavouring or colouring matter; artificial honey, whether or not mixed with natural honey; caramel [other than palmyra sugar and Palmyra jaggery]
8.	1704	Sugar confectionery [other than mishri, batasha, bura, sakar, khadi sakar, harda, sakariya, gatta, kuliya, elaichidana, lukumdana, chikkis like puffed rice chikki, peanut chikki, sesame chikki, til chikki, til patti, til revdi, sugar makhana, groundnut sweets, gajak and sugar boiled confectionery]
9.	1804	Cocoa butter, fat and oil
10.	1805	Cocoa powder, not containing added sugar or sweetening matter
11.	1806	Chocolates and other food preparations containing cocoa
12.	1901	Malt extract, food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of heading 0401 to 0404, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis not elsewhere specified or included
13.	1904	All goods i.e. Corn flakes, bulgar wheat, prepared foods obtained from cereal flakes
14.	1905	Pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products
15.	2101 11, 2101 12 00	Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee
16.	2101 20	All goods i.e Extracts, essences and concentrates of tea or mate, and preparations with a basis of these extracts, essences or concentrates or with a basis of tea or mate
17.	2104	Soups and broths and preparations therefor; homogenised composite food preparations
18.	2105 00 00	Ice cream and other edible ice, whether or not containing cocoa
19.	2106	Food preparations not elsewhere specified or included
20.	2201	Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured
21.	2202 99	Plant-based milk drinks, ready for direct consumption as beverages
22.	3503	Gelatin (including gelatin in rectangular (including square) sheets, whether or not surface-worked or coloured) and gelatin derivatives; isinglass; other glues of animal origin, excluding casein glues of heading 3501
23.	3505	Dextrins and other modified starches (for example, pregelatinised or esterified starches); glues based on starches, or on dextrins or other modified starches

(18% to 40%)

S. No.

Chapter / Heading /
Sub-heading / Tariff item

Description of Goods

2202 91 00,
2202 99

Other non-alcoholic beverages

(28% to 40%)

S. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
1.	2106 90 20	*Pan masala
2.	2202 10	All goods [including aerated waters], containing added sugar or other sweetening matter or flavoured
3.	2202 99 90	Caffeinated Beverages
4.	2202	Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice

Agriculture Sector

(12% to 5%)

S.No	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
1.	8408	Fixed Speed Diesel Engines of power not exceeding 15HP
2.	8414 20 20	Other hand pumps
3.	8424	Nozzles for drip irrigation equipment or nozzles for sprinklers
4.	8424	Sprinklers; drip irrigation system including laterals; mechanical sprayers
5.	8432	Agricultural, horticultural or forestry machinery for soil preparation or cultivation; lawn or sports-ground rollers; Parts [8432 90]
6.	8433	Harvesting or threshing machinery, including straw or fodder balers; grass or hay mowers; parts thereof
7.	8436	Other agricultural, horticultural, forestry, poultry- keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders; parts thereof
8.	8479	Composting Machines
9.	8701	Tractors (except road tractors for semi-trailers of engine capacity more than 1800 cc)
10.	8716 20 00	Self-loading or self-unloading trailers for agricultural purposes
11.	8716 80	Hand propelled vehicles (e.g. hand carts, rickshaws and the like); animal drawn vehicles

Impact on the Food Sector

1. Relief on Essentials (5% to Nil, 18% to Nil):
Items like UHT milk, paneer, pizza bread, chapathi, and paratha have seen rates drop significantly, some even reaching a nil rate. This is a major win for consumers, as the affordability of essential foods is expected to improve. Retailers and manufacturers may experience increased demand, while also needing to reassess supply logistics and pricing models to maximize benefits.

2. Dairy, Nuts, and Preserved Foods (12% to 5%):
Products such as butter, cheese, dried fruits, and edible nuts now attract lower taxes. This can boost processed food businesses and encourage the development of value-added products. Companies may need to invest in better packaging and branding to appeal to price-conscious consumers.

3. Packaged and Specialty Foods (18% to 5%):
From ice creams and chocolates to plant-based milk drinks and soups, a range of processed foods now benefit from reduced rates. This could open doors for innovation and expansion, particularly for startups and mid-sized enterprises looking to capture niche markets.

4. High-Tax Products (18% to 40%, 28% to 40%):
On the flip side, products like pan masala, carbonated beverages, and caffeinated drinks face higher tax rates. Businesses in these categories may need to rethink pricing strategies and explore diversification to stay competitive while complying with stricter tax regimes.

Impact on the Agriculture Sector

1. Affordable Machinery (12% to 5%):
Key agricultural tools such as diesel engines, drip irrigation equipment, sprinklers, and harvesters now benefit from lower tax rates. This is likely to encourage small and medium farmers to upgrade their equipment, improving productivity and reducing manual labor costs.

2. Boost to Farming Operations:
Tractors, hand pumps, and composting machines are more accessible, enabling farmers to adopt modern techniques and enhance efficiency. This can lead to better crop yields and sustainable farming practices.

3. Growth in Rural Economy:
With reduced taxation on critical farming tools, rural communities stand to gain significantly. Government initiatives promoting mechanization are expected to align with these tax benefits, potentially transforming the agricultural landscape.