Subscribe & Stay Informed

Subscribe today for free and stay on top of latest news in food industry

    Close Menu
    Food Infotech
      Facebook YouTube LinkedIn
      Food Infotech
      • Home
      • Processing
      • Packaging
      • Logistics
      • Safety
      • Articles
      • Events
      • Jobs
      • More
        • E-Mag
        • Subscription
        • Newsletter
      Facebook YouTube LinkedIn WhatsApp
      Food Infotech
      Home»News

      Food processing industry urge to reduce GST rates on packaged snacks, foods

      Shashank GauravBy Shashank GauravMarch 23, 2021Updated:March 25, 20213 Mins Read
      charts shows the growth after the goods and services tax
      Share
      Facebook Twitter LinkedIn WhatsApp

      Despite a lot of representations made to the government appealing for reduction in GST rates, the food processing industry hasn’t received any satisfactory answer till now. Yet again food industry representatives have requested the Union Finance Minister and the GST Council to cut down rates on packaged snacks, ready-to-cook and ready-to-eat food products besides other commonly used food items, prior to the GST Council meeting which is to be held next month.

      In a letter to the finance ministry, the food industry has asked to lower down the tax rates for what it calls “commonly used food products” like packaged or branded pickles, chutneys, sauces and fruit drinks, along with branded snacks like namkeen, bhujia, and potato & banana chips.

      Presently, the GST on these products falls in the 12% slab, but processors want them to be in the 5% bracket.

      The letter comes amid reports that the government is planning to merge the GST rates of 12% and 18% into a single slab.

      The companies are worried that the creation of a new tax category could lead to an increment in their tax burden and invariably their cost to consumers.

      India has four main GST rates of 5%, 12%, 18% and 28%, apart from a cess on luxury and demerit goods such as automobiles, tobacco and aerated drinks.

      The letter also mentioned that GST of 12% is levied on branded or packaged snack foods which include namkeens, bhujias, fruit and vegetable chips made of potato and banana etc. but, these are consumed not only by well-to-do sections but also by all segments of society.

      At the same time, unbranded snack foods are charged 5% GST, and this creates an peculiarity in the sale of processed foods in the nation, the letter further added.

      “This anomaly has created massive complexities and motivated the production of unsafe and unhealthy unpackaged food in the market. On the contrary, COVID-19 has shown us a road map to encourage the use of safe packaged food rather than unpackaged food. In fact, a shift of consumption from branded to unbranded foods alleviates revenue to the government and proves counter-productive,” the letter states.

      Sanjay Indani, founder, promoter & head of SafeFoodz Solutions, Navi Mumbai, said, “Most of the countries worldwide have lower tax on a lot of foods, while their inflation is within 2%. Thus, India being a country with inflation level of 6% could not afford to have higher GST for food items which makes up a major portion of Consumer Price Index. The high GST rates on food products have a detrimental influence on the growth of the sector.”





      Share. Facebook Twitter LinkedIn WhatsApp
      Shashank Gaurav

      More article from Shashank Gaurav

      Keep Reading

      Britannia Good Day launches ‘Flavors of Equality’ Pride Pack with Parle Monaco

      JENI’S Launches Ice Cream Bars Nationwide

      NutriFusion Honored as Bronze Stevie Award Winner in 2025 American Business Awards

      Leave A Reply Cancel Reply

      PROCESSING

      IFF Unveils Immersive Experience Hub in Singapore

      July 10, 2025

      SPX FLOW and Junlebao Partner to Launch Largest InfusionPlus UHT System in China

      July 10, 2025

      Kraft Heinz to Sell Italian Baby Food Unit to NewPrinces

      July 10, 2025

      Azelis Acquires ACEF to Strengthen Ingredient Portfolio and Market Presence in Italy

      July 9, 2025

      PACKAGING

      Rørosmeieriet Unveils Low-Carbon White Carton for Coop’s Änglamark Milk

      Norway’s organic dairy trailblazer, Rørosmeieriet, has stepped up once again as the first mover in…

      ULMA Packaging Wins GOLD Award for Sustainability from BIMBO Group

      ULMA Packaging has been honored with the GOLD Award for Sustainable Suppliers granted by BIMBO…

      CPC Enhances Production Efficiency with Coperion’s C-BEYOND Digital Platform

      To ensure maximum efficiency of both its extruders and the entire production process in the…

      © 2025 FOODINFOTECH.COM.
      • Home
      • About Us
      • Terms of Service
      • Privacy Policy
      • Contact Us

      Type above and press Enter to search. Press Esc to cancel.