Team siliconindia

• GST on essential food items, packaging, and transport vehicles reduced to support industry growth.
• Tax changes aim to lower production and logistics costs, and simplify compliance.
• Reforms bring predictability for businesses and affordability for consumers.

The government’s recent GST reforms in the food processing and logistics sectors are set to make a big impact on both consumers and industry players. By reducing tax rates on essential food products, packaging materials, and freight vehicles, the move is expected to lower operational costs, boost demand, and create a more predictable tax environment for businesses.

Several commonly consumed food items including UHT milk, paneer, khakhra, paratha, roti, and pizza bread, have been exempted from GST. Meanwhile, processed and packaged foods like chocolates, sauces, juices, and coffee now fall under the 5% GST slab, down from higher rates earlier. These reductions aim to make daily essentials more affordable while promoting healthy competition in the market.

In addition, GST on packaging materials such as crates and paper has been brought down to 5%, helping reduce the cost of production and distribution. The GST on transport vehicles like trucks has been lowered from 28% to 18%, offering relief to logistics providers and strengthening supply chains.

The government said this move simplifies tax compliance for food manufacturers and logistics operators, particularly MSMEs and cooperatives, by removing ambiguity in product classifications and minimizing disputes. It creates a uniform tax structure that supports long term growth and industry stability.

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At the same time, consumers benefit through stable or lower prices on essential goods, backed by other government schemes like PMGKAY and the National Food Security Act, which continue to ensure food access for millions.

These reforms are part of a broader strategy to enhance food security, support small businesses, and boost India’s competitiveness in the global food and logistics markets.