Understanding GST on Pre-Packaged and Labeled Food Items Including Curd and Buttermilk

GST or Goods and Services Tax is an indirect tax levied on goods and services. It has replaced multiple taxes like VAT, Excise Duty, Service Tax, etc. GST is a destination-based tax, which implies that it is collected from the end consumer. GST is levied on all goods and services except some exempted items.

Pre-packaged and labeled food items like curd and buttermilk are taxable under GST. These food items come under the category of packaged food and are covered under GST.

What is GST on Pre-Packaged and Labeled Food Items?

GST on pre-packaged and labeled food items is levied based on the value of the food item. The tax rate varies based on the value of the food item. The GST rate for pre-packaged and labeled food items is 5%. However, the GST rate on some specific pre-packaged and labeled food items may vary. For example, the GST rate on packaged paneer is 12%.

Pre-packaged and labeled food items are classified under the HSN code (Harmonized System of Nomenclature). The HSN code for pre-packaged and labeled food items is 2009.

How is GST Calculated on Pre-Packaged and Labeled Food Items?

GST calculation on pre-packaged and labeled food items is done based on the selling price of the food item. The GST rate is then applied to the selling price of the food item. For example, if the selling price of pre-packaged curd is Rs. 50, then the GST levied on it would be 5% of Rs. 50, which is Rs. 2.50.

Is GST Applicable on All Pre-Packaged and Labeled Food Items?

GST is not applicable to all pre-packaged and labeled food items. Some food items are exempted from GST. These items include unprocessed cereals, fresh fruits and vegetables, meat, fish, and poultry. However, if these food items are processed and packaged, they are taxable under GST.

Conclusion

Pre-packaged and labeled food items like curd and buttermilk are taxable under GST. The GST rate for these items is 5%. The GST rate for some specific pre-packaged and labeled food items may vary. The HSN code for pre-packaged and labeled food items is 2009. GST is calculated based on the selling price of the food item.

It is essential for small and medium business owners and startup founders to understand GST and its implications on their businesses. Compliance with GST is necessary to avoid any legal issues and maintain the reputation of the business.