Impact of GST on Grocery Bill

By Registrationwala

21st August 2017


Good and service tax regime is one of biggest taxation reforms in the history of Indian economy. This regime has drastically affected the grocery bills of all households. The grocery bill includes various essential items like fruits, vegetables, milk products etc. In the era of inflation one of the biggest concerns of the homemakers is the day by day increasing bill of their grocery items.

Under the GST regime, the tax rate on most of the essential commodities has been reduced by the government. While most of the essential groceries have been placed under low tax slabs, the same cannot be said for processed foods and most items containing sucrose.

There are four tax slabs of 5, 12, 18 and 28 per cent slabs under the GST regime. The GST Council has placed all the goods under these slabs.

Under the earlier taxation regime, some of the grocery items were excluded from the purview of any kind of taxation. This provision of exemption is continued in the GST regime also. Some of the goods which are nil rated under the GST regime includes the following-

•    Milk

•    Fruits and vegetables

•    Bread

•    Atta Pulses

•    Packed curd

Further, under the GST regime, the tax rate on most of the goods has been reduced by the GST Council which will make them cheaper. Items which will become cheaper under GST regime due to reduced tax rates are as follows-


          Item                                     Tax rate pre- GST            GST Rate

1.    Packed coffee/tea                    10.29%                           5%

2.    Spices                                       9.09%                            5%

3.    Packed Curd                               8.7%                            0%

4.    Packed Paneer                            9.17%                          5%

5.    Cheese                                        13.64%                        12%

6.    Ice-cream                                      25%                             18%

7.    Biscuit                                            25%                             12%

8.    Chocolates                                    33.33%                           28%

9.    Cornflakes                                     32.74%                            18%

10.    Juices                                          15.38%                           12%

However, the rate of taxes on packed food has been increased significantly under this regime. Also, there are some other items on which TAX rate has been increased. Following are the items on which the tax rate has been increased-

         Item                                  Tax rate pre-GST        GST rate

1.    Packaged Chicken                9.03%                            12%

2.    Edible oil                               16.82%                           18%

3.    Butter                                      6.38%                           12%

4.    Bhujia                                      9.03%                           12%

Thus, Good and Service tax is a mixed bag of good and bad for the Grocery items.


Impact of GST on Grocery Bill