Thu, Sep 18, 2025
No Small Change: Namkeen Manufacturers In Bind Over Adjusting Packs To New GST Rates
While the government has asked namkeen makers to pass on GST benefit with new price stickers on packs, food manufacturers say they would incur a loss from the cost of stickers, or adding insignificant quantities of the product
Sep 12, 2025 · 3 min read
The GST Council’s recent decision to reduce tax and pass on the benefit to customers has put packaged food manufacturers in a bind. They say the cost of putting new price tags on already manufactured goods will be more than the benefit they are supposed to pass on to the consumer, especially for packs priced at Rs 10 and Rs 5, which are the ones with the highest demand.
The 56th GST Council meeting reduced the GST rate on ‘namkeens, bhujia, mixture, chabena and similar edible preparations ready for consumption form (other than roasted gram), pre-packaged and labelled’ — from 12 to 5 per cent.
Typically, a wafer pack with MRP of Rs 10 from a local manufacturer contains 30-35 grams of the product. The reduction in GST means an insignificant 2-2.5 grams of wafer would need to be added to it at the printed price point.
A recent directive, dated September 9, by the Weights and Measures unit of the Ministry of Consumer Affairs, Food and Public Distribution, allowed manufacturers to put a sticker with a revised (lower) MRP that does not overlap with the original print.
Small Pack, Big Loss
Prices of small packs would be reduced to Rs 9.38, which would make transactions in cash difficult. Manufacturers would rather keep the MRP the same and increase the quantity from 30 grams to 32 grams, for which they have to put additional stickers.
“The cost of stickers would be more than the incremental quantity. Putting stickers would be viable if the quantity is in thousands. We dispatch lakhs of packs daily. How would we put stickers on them?” said a confused official of a prominent namkeen manufacturer in Gujarat.
He added that compliance with new GST rates is possible for high-value products like AC, scooters, and cars, but not small, low-priced packs. Moreover, the September 22 deadline is near, and making changes in large quantities of packs is not easy. Also, the cost of compliance is higher than the incremental benefit to customers.
“The compliance is not possible. This applies not only to us, but to 80 per cent of daily-use goods. Only manufacturers of high-value products like cars, scooters, and ACs can comply,” said another player.
The Federation of Sweet and Namkeen Manufacturers (FSNM) is meeting the government on Friday to tackle this issue. “MRP on small food packets is itself a task. Meanwhile, a large pile of already packed and supplied products remains in the market. The food industry is in a Catch-22 situation, and needs a better solution from the government,” said Firoz Naqvi, director general of FSNM. He also told The Secretariat that the September 22 deadline is too close, and that they would request the government to extend the deadline.
Naqvi also said that huge quantities of stock are lying in the market, a situation that is likely to continue even after September 22. This stock has to be sold, but no penal action should be taken against anyone who sells this after the deadline.
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