FMCGRetail & E-Commerce

GST on FMCG & Retail — Food 0-5%, Personal Care 18%, Cosmetics 28%

Complete GST guide for FMCG and retail: food & grocery (0-12%), personal care (18%), cosmetics (28%), beverages (12-40%), household products, packaged snacks, e-commerce TCS, MRP rules, and the July 2022 pre-packaged food taxation change.

0%

Essential Food (unbranded)

5%

Branded Cereals/Pulses

5-12%

Packaged Food (branded)

28%

Cosmetics/Perfumes

18%

Detergents/Soap

18%

Biscuits/Namkeen

18%

Toothpaste/Shampoo

28%+12%

Soft Drinks/Aerated

FMCG & Retail — GST Framework

Food & Grocery — 0% to 12%

Fresh/unpackaged food: 0% (nil GST) — rice, wheat, vegetables, fruits, eggs, meat (unbranded, unpackaged). Since 18 July 2022 (47th Council): PRE-PACKAGED & LABELLED food attracts 5% GST. This includes: branded/unbranded cereals, pulses, flour (atta), curd, buttermilk, paneer — IF sold in pre-packaged form with retail label under Legal Metrology Act. Thresholds: packs ≤25kg attract 5% (earlier exempt). Loose/unpackaged items: still 0%. Honey: 5%. Spices (packaged): 5%. Dry fruits: cashew 5%, almonds 5-12%. Sugar: 5%. Tea/coffee: 5%. Baby food: 5%. Namkeen/bhujia (packaged): 12%. The July 2022 change was CONTROVERSIAL — extended GST to dal, atta, rice packets — hit common man's grocery bill.

Personal Care & Cosmetics — 18-28%

Cosmetics/make-up/perfumes/deodorants: 28% (luxury/sin goods category). Skincare (creams, lotions, sunscreen): 18%. Shampoo: 18%. Soap (bathing): 18%. Soap (laundry/washing): 18%. Toothpaste: 18%. Hair oil (branded): 18%. Razors/blades: 18%. Sanitary napkins: 0% (exempted since 21 July 2018 — was 12% earlier, massive public campaign #LahuKaLagaan led to exemption). Diapers: 12%. Talcum powder: 28%. Perfume/eau de toilette: 28%. Sindoor/bindi/kumkum: 5%. Mehendi/henna (natural): 5%. The 28% on cosmetics is one of the most debated — industry argues cosmetics are daily-use, not luxury. Counter-argument: premium cosmetics are discretionary spending.

Beverages — 5% to 28%+Cess

Drinking water (packaged): 18%. Mineral/aerated water: 28% + 12% cess = 40%. Soft drinks (Coca-Cola, Pepsi): 28% + 12% cess = 40%. Fruit juice (packaged >25% fruit): 12%. Fruit juice (<25% fruit / fruit drink): 28% + 12%. Energy drinks: 28% + 12% cess. Tea/coffee (ready-to-drink, packaged): 12%. Milk-based drinks (flavoured milk, lassi packaged): 12%. Buttermilk (packaged): 5%. Tender coconut water (packaged): 12% (natural/loose: 0%). Alcoholic beverages: OUTSIDE GST (state excise). Ice cream: 18% (reduced from 28% in 2021). Non-alcoholic beer: 28%. The 40% on aerated drinks was justified as health/sin tax — but criticized as regressive vs 5% on packaged fruit juice.

Household & Cleaning — 18-28%

Detergent (powder/liquid): 18%. Dishwash (bar/liquid): 18%. Floor cleaner: 18%. Toilet cleaner: 18%. Air freshener: 28%. Mosquito repellent (coil, liquid): 18% (reduced from 28% in 2018). Incense sticks (agarbatti): 5%. Candles: 12%. Paper napkins/tissue paper: 18%. Plastic bags/polythene: 18%. Steel utensils: 18%. Aluminum foil: 18%. Matchbox: 5%. Broom/jhaadu: 5%. Kitchen gas stove: 12%. LPG (domestic cylinder): 5%. Batteries (alkaline): 28%. LED bulbs: 18% (reduced from 28%). The FMCG sector was biggest beneficiary of GST — pre-GST multiple taxes (excise+VAT+entry+octroi) often totalled 25-27% on soap/detergent vs flat 18% now.

Packaged Snacks & Confectionery — 5-28%

Biscuits (all varieties): 18% (irrespective of price — earlier ≤₹100/kg was 5%). Chocolate/cocoa products: 18%. Namkeen/bhujia (branded packaged): 12%. Chips/wafers: 12%. Instant noodles (Maggi, etc.): 18%. Ice cream: 18%. Cake/pastry: 18%. Chewing gum: 18%. Sugar confectionery (candy, toffee): 18%. Popcorn (pre-packaged non-caramel): 12%. Caramel popcorn: 18%. Ready-to-eat meals (frozen): 18%. Breakfast cereals (cornflakes): 18%. Protein bars: 18%. Paan masala (with tobacco): 28% + cess (very high combined rate). Supari (betel nut): 18%. Papad: 0% (exempt). Pickles (branded): 12%. The 18% on ALL biscuits regardless of MRP was criticized — Parle-G (₹5 packet) taxed same as premium imported biscuits.

Retail & E-Commerce — Compliance

Retail stores: must display GST-inclusive MRP on all packaged products (Legal Metrology). No additional GST can be charged over MRP. E-commerce: TCS (Tax Collected at Source) — platform deducts 1% TCS on every seller transaction: 0.5% CGST + 0.5% SGST. Mandatory registration for ALL e-commerce sellers (no ₹20L threshold exemption). Marketplace model: platform is 'e-commerce operator', seller is 'supplier'. GST on commission charged by marketplace: 18%. Flipkart/Amazon logistics: 18%. Cash-on-Delivery charges: 18% (logistics service). Product returns: credit note mechanism for GST reversal within timeframe. Flash sales/discounts: GST calculated on ACTUAL transaction value (after discount), not MRP. Buy-1-Get-1: GST on total consideration paid — free item is not separate supply.

FMCG & Retail — GST Rate Table

ItemHSNGST RateNotes
Rice/wheat/pulses (loose)1006/10010%Unbranded, unpackaged
Rice/wheat/pulses (pre-packaged)1006/10015%Since Jul 2022
Biscuits (all)190518%All price ranges
Soft drinks/aerated water220228%+12%40% total
Cosmetics/perfumes3304/330328%Luxury category
Soap/shampoo/toothpaste3401/330518%Daily personal care
Detergent/cleaning products340218%Household
Sanitary napkins96190%Exempt since 2018
Packaged drinking water220118%Branded bottles
Namkeen/chips (packaged)2106/200512%Branded snacks
Fruit juice (>25% fruit)200912%Natural juice
Ice cream210518%Reduced from 28% in 2021

Frequently Asked Questions

Why did GST on packaged food (dal, atta, rice) start from July 2022 — what changed?
47th GST Council (June 2022) recommended: ALL pre-packaged and labelled food items (under Legal Metrology Act) should attract 5% GST — effective 18 July 2022. BEFORE: Only 'branded' food was taxed. Loophole: companies voluntarily 'disclaimed' brand (forgo trademark enforcement) to sell as 'unbranded' → escaped GST. Revenue loss: estimated ₹3,500-4,000 crore annually from brand disclaimer abuse. NEW RULE: Whether branded or not — if it's in a PACKAGE meant for retail sale with label (weight, MRP, manufacturer) under Legal Metrology Act, 5% GST applies. Impact: ₹2/kg atta (₹100 for 50kg bag now has ₹5 GST), ₹1/kg rice. Criticism: hits poor consumers who buy packaged food from kirana stores. Defence: loose/unpackaged items remain 0% — consumers can choose loose atta at 0%. Reality: urban India mostly buys packaged (Aashirvaad, Fortune) — rural still buys loose.
How does GST work on Amazon/Flipkart — who pays what?
E-commerce GST has MULTIPLE layers: (1) SELLER: pays GST on sale price (5/12/18/28% depending on product). Must be registered — no ₹20L exemption for e-commerce sellers. (2) PLATFORM (Amazon/Flipkart): deducts 1% TCS (0.5% CGST + 0.5% SGST) from payment to seller. Platform files TCS return (GSTR-8). (3) PLATFORM COMMISSION: seller pays 18% GST on platform's commission/fees (typically 5-25% of sale). (4) LOGISTICS/DELIVERY: 18% GST on shipping charges. (5) BUYER: pays inclusive price (MRP already includes GST). No additional tax. Money flow on ₹1,000 sale: Customer pays ₹1,000 → Amazon keeps ₹200 commission (₹36 GST from seller) → Amazon deducts ₹10 TCS → Seller receives ₹790 → Seller owes government: GST on ₹1,000 minus TCS ₹10 credit. If seller is in Composition scheme: CANNOT sell on e-commerce. GSTR-2B auto-populates TCS credit for seller. Monthly reconciliation needed.
Why are sanitary napkins exempt but diapers are at 12% — is this gender bias?
Sanitary napkins: EXEMPT (0%) since July 2018. History: Initially 12% GST (July 2017). Massive campaign '#LahuKaLagaan' (Tax on Blood) — lakhs of signatures, parliamentary debates, public outrage. 28th Council meeting: reduced to 0%. Logic: menstrual hygiene is a RIGHT, not luxury. Period poverty affects millions of Indian women. Diapers: 12% GST. Argument for parity: diapers are also 'essential hygiene' for infants/elderly. Counter-argument: (a) diapers have alternatives (cloth nappies), (b) not a gender-specific biological necessity, (c) diaper users typically have higher income (choice product). Condoms: 0% (exempt) — family planning/public health. The differential treatment is defended as: biological necessity (sanitary napkins) vs convenience choice (diapers). Industry lobbies for diaper reduction to 5% — so far unsuccessful. Some economists argue ALL hygiene products should be 5% maximum.
Can retailers charge GST over and above MRP — is it legal?
STRICTLY ILLEGAL. MRP = Maximum RETAIL Price. It INCLUDES all taxes (including GST). Legal Metrology Act 2009 + Packaged Commodities Rules: manufacturer must print MRP inclusive of ALL taxes. Retailer CANNOT charge even ₹1 above MRP — violation carries fine up to ₹25,000 (first offense), ₹50,000 (subsequent). Exceptions where GST CAN be charged over displayed price: (1) RESTAURANTS: menu price can be exclusive of GST (customer pays price + 5/18% GST). Restaurant food is 'service', not 'packaged commodity'. (2) SERVICES: hotel room tariff, salon services — can display pre-tax rates. (3) LOOSE/UNPACKAGED goods: no MRP requirement — shop can add GST to displayed price. Common scam: some shops charge 'extra GST' on packaged products (especially sweets/mithai during festivals). This is ILLEGAL. Consumer can: (a) refuse to pay, (b) file complaint with Consumer Forum, (c) report to Legal Metrology department. Online shopping: listed price is usually inclusive of GST. If shown as 'plus tax' — the checkout total is the MRP equivalent. Returns/refunds should include GST portion.

Retail Billing — Multi-Rate HSN, E-Commerce TCS, MRP Compliance

Laabam.One auto-classifies FMCG products by HSN for correct 0/5/12/18/28% rates, manages e-commerce TCS reconciliation (GSTR-8 matching), handles pre-packaged food 5% transition, and ensures MRP-inclusive pricing on all retail invoices.

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