Packaged Food Business Set to Grow on GST Rate Cuts

11-Sep-2025 03:41 PM

Mumbai. Due to reduction in Goods and Services Tax (GST) rates, the business of packaged food products is expected to grow because its price will come down due to less tax. The reduction in GST rates is going to be implemented or effective from Navratri day on 22 September.

Actually, under the new amendment, the government has abolished two of the four slabs of GST, 12 percent and 28 percent, and now mainly 5 percent and 18 percent slabs will be effective. Apart from this, a new tax slab of 40 percent has been imposed for harmful (tobacco) products and luxury items.

According to industry-trade analysts, after the new tax rate comes into effect, the business of grains, pulses, flour and other essential items of daily use is expected to grow more in packaged format.

After the new amendment, not only have many essential commodities been exempted from tax, but they have also been removed from the old slabs of 12%, 18% and 28% and included in the 5% tax slab.

As a result, many free packaged food products will now become cheaper as they will be taxed at 5% or zero%. Earlier, only loose format or unlabeled products were included in this category. Now packaged food products have also been included in this list.

This will reduce the huge difference in the prices of products of both categories due to tax. As a result, consumers will gradually start getting attracted to packaged products instead of loose form for food items, dairy products and bakery products.

The demand and consumption of packaging of products which have been exempted from tax is expected to increase rapidly. This will benefit all parties during the festivals.