55th GST Council Extends Concessional 5% GST Rate for Inputs used in Food Preparation
The government's commitment to assisting the food industry and offering assistance to businesses and consumers is demonstrated by the concessional 5% GST rate on food preparation inputs
The Union Finance Minister Nirmala Sitharaman chaired the 55th meeting of the GST Council today (21st December 2024) at Jaisalmer, Rajasthan. The council decided to extend the concessional 5% GST rate for inputs used in food preparation. An important step to promote the food processing and hospitality sectors while maintaining consumer affordability is the concessional 5% GST rate for...
The Union Finance Minister Nirmala Sitharaman chaired the 55th meeting of the GST Council today (21st December 2024) at Jaisalmer, Rajasthan. The council decided to extend the concessional 5% GST rate for inputs used in food preparation.
An important step to promote the food processing and hospitality sectors while maintaining consumer affordability is the concessional 5% GST rate for inputs used in food preparation. An outline of the background, ramifications, and potential results of this concessional rate is provided below:
At the moment, processed food goods that are exempt from basic raw agricultural products (such as fresh vegetables and grains) are reduced by 5% or 12%, depending on the product. Packaged foods and luxury goods are subject to an 18% tax or more.
The purpose of the 5% concessional rate extension was to encourage the food preparation industry, which includes eateries, caterers, and food processing facilities. In the end, it will benefit consumers by cutting costs and lessening the tax burden on businesses.
Certain necessary ingredients for food preparation, like flour, cereals, and pulses, are eligible for the discounted pricing. Ingredients such as seasonings and spices, edible oils and fats, materials used to package food products, Some processed intermediates, such as curry bases or tomato paste.
Better margins and more competition in food item pricing are the results of lower input costs for the food service providers. Customers will probably see a decrease in the price of processed items and prepared meals. It will improve the profitability of restaurants, catering companies, and small food manufacturing facilities for SMEs.
The government's commitment to assisting the food industry and offering assistance to businesses and consumers is demonstrated by the concessional 5% GST rate on food preparation inputs. To optimize its advantages and handle any potential drawbacks, however, cautious use and oversight are necessary.
The meeting was attended by Union Minister of State for Finance, Shri Pankaj Chaudhary, Ajay Seth ( Revenue Secretary) along with Chief Ministers from Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha, and Deputy Chief Ministers from Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana.
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