VAT on Food Products

• VAT was imposed on food items at different rates based on processing and branding
  
• Essential and unprocessed food items were largely exempt to protect low-income consumers
  
• Processed, packaged, and branded food products attracted standard VAT rates
  
• States had the authority to fix VAT rates, so rates varied slightly across India
  
• VAT on food items aimed to balance revenue needs with food affordability

Exempt and Zero-Rated Food Items

• Unprocessed cereals like rice, wheat, and maize were generally VAT-exempt
  
• Pulses, fresh fruits, and vegetables were often included in the zero-rated schedule
  
• Unbranded edible oils and flours were also commonly exempt
  
• Milk (unbranded and fresh) and curd were kept outside the VAT net in most states
  
• Salt, jaggery, and unprocessed sugar were usually exempt from VAT

Low-Rate VAT on Basic Processed Foods

• Branded atta, maida, and suji typically attracted VAT rates of 4% to 5%
  
• Edible oils, ghee, and packaged spices fell under the 4% or 5% VAT bracket
  
• Tea, coffee (unbranded), and cocoa powder were taxed at concessional rates
  
• Bread (other than cakes or pastries) was often taxed at a lower or nil rate
  
• Bakery items like rusks and buns generally had VAT around 4% to 5%

Higher VAT on Branded and Luxury Food Products

• Chocolates, candies, and ice creams attracted standard VAT rates of 12.5% or more
  
• Branded and packaged snack items like chips, wafers, and namkeen were taxed at 12.5%
  
• Non-alcoholic beverages such as soft drinks and fruit juices were under 12.5% VAT
  
• Confectionery items like pastries, cakes, and cookies faced higher VAT slabs
  
• Processed meat and frozen foods often came under the general VAT rate slab

State-Wise Variations and Post-GST Context

• While most states followed a similar pattern, actual rates varied slightly from state to state
  
• Some states taxed branded food products at 14.5% or higher before GST
  
• Differences in classification led to confusion over what constituted “branded” or “processed”
  
• The introduction of GST unified most food tax rates into 0%, 5%, 12%, and 18% categories
  

VAT rates on food are now only relevant for historical reference and old assessments