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.
Latest Updates21st 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% |