Namkeens and similar products to 5% Indian Breads & Paneer Shift to 0% Slabs
New Delhi, [04/09/25] — The Federation of Sweets & Namkeen Manufacturers (FSNM) today welcomed a significant revision of GST slabs, with many food items previously taxed at 28%, 18%, and 12% now aligned to the lower 5% and 0% slabs. This landmark reform reflects a more realistic, growth-friendly tax framework for India’s vibrant food manufacturing and retail sectors, placing special emphasis on namkeen, paneer, and Indian breads as key beneficiaries. The reform also covers a broad range of other items, including cakes, pastries, chocolates, ice creams, dry fruits, nuts, and paneer, among others.
We sincerely commend the visionary initiative of our Hon’ble Prime Minister to “Reform, Perform, and Transform,” and acknowledge it as a bold step toward a developed Bharat (Viksit Bharat). We greatly appreciate the launch of Next-Generation GST reforms, which aim to simplify tax rates, minimize disputes, and align similar tax rates to reduce classification disputes, thereby enhancing the overall ease of doing business.
Our heartfelt gratitude goes to the Hon’ble Prime Minister, the Hon’ble Finance Minister, and all State Governments for advancing GST 2.0, which seeks to simplify the tax structure by reducing slabs and bringing most processed food items into the same bracket at 5 percent.
Key Highlights
• Slab realignment: A wide range of food items formerly under 28%, 18%, and 12% GST are now placed under 5% or 0% GST.
• Expanded list of beneficiaries: Namkeen, Indian breads, cakes, pastries, chocolates, ice creams, dry fruits, nuts, and paneer feature prominently,underscoring their role in daily diets and the MSME supply chain.
• Broader coverage: The reform extends to staple and processed foods, reflecting a comprehensive approach to rate rationalisation.
• Simplified compliance: The move streamlines the tax structure, reduces classification disputes, potential litigation risks and supports formalisation across the food processing sector and boosting ease of doing business.
• MSME & SME boost: Lower rates improve margins, working capital, and competitiveness for small manufacturers, distributors, and retailers.
• Consumer benefit: The reform is expected to ease price pressures on essential foods, enhancing affordability for households across income levels and promoting ease of living.
Statement from FSNM
“This is a watershed moment for India’s food sector. By moving items out of the 28%, 18%, and 12% slabs into the 5% and 0% categories, the government has created a simpler, fairer, and more growth-oriented tax regime. Namkeen, paneer, and Indian breads—along with cakes, pastries, chocolates, ice creams, dry fruits, and nuts—will benefit from lower tax incidence and improved supply-chain efficiency. FSNM will work closely with the Ministry of Finance, the GST Council, and state authorities to ensure smooth implementation, clear invoicing and ITC guidance, and quick transmission of benefits to consumers,” said Firoz H. Naqvi, Director General, FSNM.
He also added, “FSNM had presented a comprehensive list of 64 items outlining areas of confusion in the GST framework. We are pleased that the government has addressed almost all of these items, reflecting a constructive and responsive approach to policy reform that directly aligns with the needs of the industry.”
FSNM’s Next Steps
• Member guidance: Provide detailed instructions on invoicing, ITC treatment, and transition arrangements under the new rates.
• Price & consumer impact monitoring: Track pricing, demand, and consumption patterns to ensure benefits reach consumers.
• Policy engagement: Continue dialogue with policymakers to resolve edge cases and ensure uniform, nationwide adoption.
• Export & growth alignment: Align sector strategies with national goals to strengthen India’s position as a global food hub and enhance export competitiveness.
Impact for the Sector
• MSMEs and SMEs: Rate reductions ease tax costs and compliance burdens,fostering greater formalisation and business growth.
• Consumers: Lower tax incidence across a wide spectrum of foods enhances affordability and access to nutritious options.
• Employment and livelihoods: A clearer, lower-tax regime is expected to stimulate investment and job creation across the supply chain—from farmers to retailers.
About FSNM
The Federation of Sweets, Namkeen, and Mithai Manufacturers (FSNM) is the apex body representing India’s sweets, namkeen, and mithai sector. FSNM advocates for policy clarity, supports MSMEs, strengthens export competitiveness, and promotes supply chain efficiency to enhance livelihoods across the food processing ecosystem.
Media contact
Firoz H. Naqvi
Director General-FSNM
Email: sweetsandnamkeen@gmail.com
Phone: +91-9867992299
Website: www.fsnm.in