Nov 11, 2025
India’s GST rate for food and beverages (2025) has been simplified. Effective September 22, 2025, the old 5%, 12%, 18%, and 28% slabs are replaced by 0%, 5%, 18%, and a special 40% rate for sin and luxury goods. This major reform reshapes how GST on food items is applied across staples, snacks, restaurant bills, and catering services.
Simplified GST Food Classification 2025
GST Food Slab 2025 | What’s Included | Examples |
|---|---|---|
0% (Zero GST) | Basic staples & essentials | Rice, wheat, dal, pulses, fruits, vegetables, eggs, milk, paneer, chapatis |
5% (Merit Rate) | Most processed & packaged foods | Bakery items, biscuits, cheese, snacks, namkeens, sauces, juices, non-carbonated drinks |
18% (Standard Rate) | Limited premium or processed products | Some restaurant and catering services, packaged water |
40% (Sin/Luxury Rate) | Sugary, carbonated & caffeinated drinks | Colas, sodas, energy drinks, sweetened coffee beverages |
GST on Food Items: What’s Cheaper Now
Everyday groceries and kitchen staples are now either tax-free or just 5% under the new GST food slab 2025:
Zero GST foods: Rice, wheat flour, millets, pulses, eggs, milk, paneer, and ready chapatis.
5% GST foods: Packaged snacks, biscuits, cakes, chips, jams, sauces, pasta, noodles, butter, cheese, ghee, and non-carbonated fruit juices.
This lower GST rate on food & beverages in India will reduce grocery bills by roughly 5–10%, making essentials and packaged foods more affordable.
GST on Beverages: Juices Down, Sodas Up
5% GST: Fruit and vegetable juices, plant-based milk (soy, almond, oat), instant coffee, and tea mixes.
0% GST: Plain and UHT milk, drinking water.
40% GST: All carbonated or caffeinated drinks, including colas, sodas, and energy drinks.
The shift encourages healthier choices by taxing sugary beverages heavily while keeping natural drinks affordable.
GST on Restaurant Bills and Catering Services
While packaged food prices drop, GST on restaurant bills and GST on catering services remain largely unchanged:
5% GST for non-AC and standard restaurants (without input tax credit).
18% GST for restaurants in hotels or those availing ITC.
18% GST for catering services and banquet orders.
This maintains consistency while easing compliance for hospitality businesses.
Impact on Consumers and Businesses
Consumers: Expect lower grocery costs and cheaper bakery, dairy, and snack products. Sugary sodas will cost more.
Businesses: Simplified GST structure means fewer slabs, easier billing, and reduced compliance burden. Food manufacturers and retailers benefit from clearer tax classification and improved margins.
Quick Price Comparison
Item | Old GST | New GST | Approx. Price Change |
|---|---|---|---|
Chocolate bar | 18% → 5% | ₹118 → ₹105 | 11% cheaper |
Biscuits | 12% → 5% | ₹33.6 → ₹31.5 | 6% cheaper |
Cola (500ml) | 28% → 40% | ₹51.2 → ₹56 | 10% costlier |
UHT Milk | 5% → 0% | ₹63 → ₹60 | 5% cheaper |
Key Takeaways
Simpler GST food classification with just four rates: 0%, 5%, 18%, 40%.
Essential foods are GST-free; processed foods mostly 5%.
Sodas and energy drinks now taxed at 40%.
Lower costs for consumers, simpler compliance for food businesses.
GST on restaurant bills and catering remains unchanged.
Conclusion
The new GST food slab 2025 brings relief for households and clarity for businesses. With 0% and 5% GST on food items, essentials and snacks become cheaper, while sugary and luxury beverages face higher taxes. The reform simplifies GST on food & beverages in India, promoting affordability, transparency, and healthier consumption.
Also Read:
Complete GST Rate List 2025: Updated Slabs for Goods & Services
New GST Rates for Wellness & Beauty in 2025
GST on Bakery Products: Bread, Cakes, and Cookies Explained (2025 Update)
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