India has unified GST rates for bakery products to 5% effective September 2025. Learn about the new rates, HSN codes, and compliance steps.
The Goods and Services Tax (GST) framework for bakery and confectionery items has been simplified for businesses, particularly after the 56th GST Council meeting. As of September 22nd, 2025, a uniform 5% GST rate is applicable to most products in this category. This significant adjustment aims to lower consumer prices and provide greater clarity for businesses regarding their tax obligations. Important points include: A 5% GST rate is now uniformly applied to various items such as cakes, pastries, biscuits, chocolates, extruded snacks, jams, sugar-boiled confectionery, and milk-based drinks. Rusks and toasted bread continue to be taxed at the 5% rate. Bakeries are required to obtain GST registration if their annual turnover exceeds ₹40 lakhs for goods or ₹20 lakhs for services.
What is GST for Cakes and Pastries?
GST on bakery items, including cakes and pastries, represents a consumption tax levied on their sale within India. Following the 56th Council meeting, this tax is predominantly set at 5%. The primary objectives are to simplify tax compliance procedures and alleviate the tax burden for both businesses operating in the sector and their customers.
GST Applicability for Bakery Products
- Businesses in the bakery sector must register for GST if their yearly turnover for goods exceeds ₹40 lakhs, or ₹20 lakhs for services.
- Registered bakeries are obligated to collect GST, correctly present Harmonized System of Nomenclature (HSN) codes, and issue valid tax invoices.
- Only entities registered under GST are eligible to claim input tax credits for raw materials and supplies used in their bakery operations.
GST Rates for Bakery and Confectionery Items
The table below outlines the revised GST rates for various bakery and confectionery items:
| HSN Code | Description (Simplified) | New GST Rate | Old GST Rate |
|---|---|---|---|
| 1905 | Pastries, cakes, biscuits, other bakery wares | 5% | 18% |
| 1905 | Rusks, toasted bread and similar toasted products | 5% | 5% |
| 1806 | Chocolates, food preparations containing cocoa | 5% | 18% |
| 2202 | Beverages containing milk | 5% | 12% |
| 1704 | Sugar boiled confectionery | 5% | 12% |
| 2007 | Jams, fruit jellies, marmalades, fruit/nut purées | 5% | 12% |
Actions Required by Bakers After the Latest Council Meeting
These recent tax rate adjustments provide financial advantages for both businesses and consumers. Bakeries should undertake the following actions:
- Update all point-of-sale, billing, and accounting systems to correctly implement the new 5% GST rate.
- Verify the use of accurate HSN codes and ensure proper invoicing for all transactions.
- Continuously track their annual turnover to meet GST registration deadlines and claim appropriate input tax credits.
- Adjust pricing strategies for products to reflect the reduced GST rate, thereby enhancing market competitiveness and ensuring regulatory compliance.
