Namkeens to get cheaper as Centre announces GST cuts

At the 54th GST Council meeting on Monday, the Centre decided to cut down on the cost of namkeen and savoury products, announced Finance Minister Nirmala Sitharaman at the press meet after the meet. The GST rate on such products have been reduced prospectively to 12 percent from 18 percent, she said.

"Decision on namkeens, extruded, expanded savoury food items - GST rate on these is being reduced prospectively from 18 to 12 percent," she said during the press conference. The finance minister further clarified that the GST rate has been reduced 'prospectively' and not 'retrospectively.'

The food items that are included in this are extruded or expanded savoury or salted products, excluding un-fried or un-cooked snack pellets (regardless of their name) produced through extrusion and classified under HS 1905 90 30.


This aligns the rate with that of namkeens, bhujia, mixture, chabena (pre-packaged and labeled), and similar ready-to-eat preparations classified under HS 2106 90.

Snacks made using the extrusion process will be taxed at 18 percent. However, other snacks and savory items, such as bhujia, could potentially be subject to a 12 percent GST.

However, un-fried or un-cooked snack pellets produced through extrusion will continue to be taxed at a GST rate of 5 percent.

Currently, expanded snacks face an 18 percent GST, while regular savory snacks are taxed at 12 percent, which the recent ratification addressed.

The Fitment Committee established by the Council recommended classifying these items as savory snacks. Therefore, new cases will be subject to a 12 percent GST, while existing cases will continue to incur an 18 percent GST for the time being.

The press briefing was held by the Finance Minister, Minister of State for Finance Pankaj Chowdhury, Revenue Secretary Sanjay Malhotra, Chairperson CBIC Sanjay Kumar Agarwal, and researchers Shanshank Priya and Vivek Ranjan in New Delhi.

Other major announcements from the 54th GST Council meet

The recent council meeting reviewed a status report on online gaming, which showed a staggering 412 percent increase in gambling revenue, reaching Rs 6,909 crore over six months. In response, two new Groups of Ministers (GoMs) have been established - one to focus on medical and health insurance and another to decide the use of compensation cess after March 2025.

Additionally, the GoM on rate rationalization, now including new members specifically for medical insurance, has been tasked with submitting a report in October for discussion at the committee's November meeting.

The GST Council also announced a reduction in the rate on cancer drugs from 12 percent to 5 percent.