01
Pre-packaged and Labelled
The two tests a pack has to meet, the 25 kg line, and why a 30 kg bag of the same atta is treated differently from a 25 kg one.
Grocery Store Operations Guide for Indian Kirana Owners
A 10-page guide for kirana and supermarket owners. Why the same sack of rice can be taxed or exempt depending only on how you pack and sell it, what moved to nil and 5% on the grocery shelf in 2025, and how to run expiry, billing speed and festive stock without losing margin you never see going.
- The 25 kg rule, straight from the Ministry of Finance FAQ
- Why leaving the label off does not make a pack exempt
- Expiry, wastage and billing speed, the three places kirana margin leaks
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Petpooja presents
Grocery Store Operations Guide
For Kirana, Supermarket & Provision Stores
7
Chapters · 10-page PDF
2026
What's Inside
What the 10-page guide covers
02
Sold Loose, No GST
You pay GST buying a labelled 25 kg bag, and charge none selling it loose. Plus the input credit consequence to raise with your accountant.
03
What Moved in 2025
Indian breads, UHT milk and packaged paneer to nil. Namkeen, sauces, pasta, chocolates, soaps and toothpaste to 5%.
04
Expiry and Batch Control
First expiry first out at the shelf, batch capture at goods inward, a weekly near-expiry list and a decision on every line.
05
Billing at Speed
Barcodes, scale integration and why the rate must never be decided by the person at the counter with a queue behind them.
06
The Festive Season
Why gifting stock gets bought ahead of the festival, how to read your own last-year sales week by week, and the carry-forward trap on hampers.
Do all of this automatically with Petpooja Invoice
Petpooja Invoice holds the correct rate against every item, so a basket mixing nil-rated staples, 5% packaged goods and 18% household lines bills correctly without anyone deciding at the counter. Batch and expiry tracking and weighing-scale integration come with it.
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Why This Matters
The Same Rice, Taxed Three Different Ways
A 25 kg labelled bag of atta carries GST. A 30 kg bag of the same atta does not. And if you open the 25 kg bag and sell it loose by the kilo, you charge no GST on those sales at all. Same commodity, same shop, same day.
Until July 2022 the test was whether goods carried a registered brand name. Since 18 July 2022 it is whether they are pre-packaged and labelled, and the Ministry of Finance set out exactly what that means.
Two things have to be true together. The goods are pre-packaged, meaning placed in a package without the purchaser present so the contents have a pre-determined quantity. And the package is required to bear declarations under the Legal Metrology Act 2009.
The 25 kg line comes from the second test. Under rule 3(a) of the Legal Metrology (Packaged Commodities) Rules 2011, packs above 25 kg or 25 litres do not require the declaration, so they fall outside the definition. The Ministry illustrates it with atta: a 25 kg retail pack is liable to GST, a 30 kg pack of the same product is exempt.
Here is the part most people get backwards. Leaving the label off does not make a pack exempt. The FAQ deals with a miller selling 20 kg rice packs without the required declaration, and the answer is that it is still pre-packaged and labelled for GST, because a declaration was required. The test is what the rules demand, not what was printed.
On top of that, the grocery shelf itself moved in 2025. All Indian breads, UHT milk and pre-packaged paneer went to nil. Packaged namkeen, bhujia, sauces, pasta, chocolates and coffee came down to 5%, as did soaps, shampoos and toothpaste. So a single basket now routinely mixes nil-rated, 5% and 18% lines, and nobody at a counter can hold that in their head. The rate has to live on the item. That is the practical difference between a billing system built for a grocery shop and manual billing.
This guide works through all of it: the tax treatment first, then expiry and batch control, billing speed, supplier terms and credit notes, and the festive season. Every rule carries its section or rule number so you can check it against the CBIC text yourself.
Sample Preview
Five things the guide settles for you
Here's a preview of what you'll get inside:
The 25 kg line: A 25 kg retail pack of atta is taxable; a 30 kg pack of the same atta is not, because above 25 kg no declaration is required
Sold loose: Buy a labelled 25 kg bag and your supplier charges GST. Sell it loose by the kilo and you charge none
The label trap: A 20 kg pack sold without the required declaration is still taxable. The test is whether a declaration was required, not whether it was printed
Multi-packs: Ten 10 kg retail packs inside one larger pack are taxable, but a single 50 kg package of rice is not
What moved in 2025: All Indian breads, UHT milk and packaged paneer to nil. Namkeen, sauces, pasta, chocolates, soaps and toothpaste to 5%
... plus expiry and batch control, billing speed, supplier credit notes and returns, festive gifting stock, and four numbers to compute from your own records, across 7 chapters.
Key Stats
The rules that decide your grocery billing
25 kg
The line. At or below it, a retail pack requires a Legal Metrology declaration and is taxable. Above it, no declaration is required and it is not.
Source: Rule 3(a), Legal Metrology (Packaged Commodities) Rules 2011, via the Ministry of Finance FAQ of 18-Jul-202218 Jul 2022
When the test stopped being whether goods carried a registered brand name and became whether they are pre-packaged and labelled.
Source: Notification 6/2022-Central Tax (Rate), dated 13-Jul-2022Nil
Where all Indian breads, UHT milk and pre-packaged paneer sit after the 2025 reform. Namkeen, sauces, pasta, chocolates, soaps and toothpaste came down to 5%.
Source: Press Information Bureau, GST Reforms 2025, dated 04-Sep-2025
Common Mistakes
7 Mistakes Kirana Owners Make
01
Thinking the brand name still decides it
That test ended on 18 July 2022. Since then it is whether the goods are pre-packaged and labelled, which is why unbranded packed staples can carry GST and branded loose ones may not. The change was made by Notification 6/2022-Central Tax (Rate); the CBIC text is the reference.
02
Assuming a bigger pack is just a bigger version of the same supply
A 25 kg retail pack of atta is taxable and a 30 kg pack of the same atta is not. If both share one item code in your system, one of them is being billed wrong.
03
Leaving the label off to avoid the tax
It does the opposite. A pack that was required to bear a declaration is treated as pre-packaged and labelled whether or not the declaration was printed, and now you have a Legal Metrology problem as well.
04
Charging GST on staples you sell loose
If you open a labelled bag and sell it by the kilo, that supply is not a packaged commodity for GST. Charging tax on it means collecting money from customers that you then have to account for.
05
Ignoring the input credit side of loose sales
Where the outward supply is not taxable, input tax credit attributable to it is restricted under Section 17(2) and computed under Rule 42. The Ministry's FAQ does not cover this, so raise it with your accountant rather than assuming.
06
Leaving nil-rated lines blank instead of setting them to nil
A blank rate and a nil rate are not the same thing in most billing systems or in your returns. Nil-rated, exempt and non-GST supplies still have to be reported.
07
Running the udhaar book outside the system
Credit given from a diary is among the hardest money in a shop to recover, because nobody can see the total or the age of it. If it is not recorded against a customer in the system, it is difficult to treat as an asset. It is one of several inventory and record-keeping mistakes retail stores make.
Comparison
Packed vs Loose
| Aspect | Sold pre-packed | Sold loose |
|---|---|---|
| How it is sold | In a labelled pack of 25 kg or less | Loose, weighed out from a larger pack |
| Is a Legal Metrology declaration required | Yes, under rule 6 | No |
| Pre-packaged and labelled for GST | Yes | No |
| Do you charge GST to the customer | Yes | No |
| Did you pay GST buying it | Yes, if you bought a labelled pack of 25 kg or less | Yes, on that same pack |
| Input credit position | Normal | Restricted under Section 17(2), computed under Rule 42. Check with your accountant |
| Same commodity | Rice, atta, dal, sugar | Rice, atta, dal, sugar |
Swipe the table sideways to see the full comparison.
Get the shelf billing right
Download the free guide and work through your own staples against the 25 kg line.
FAQ
Frequently asked questions
Is GST charged on rice, atta and dal?
It depends entirely on the pack. Since 18 July 2022 the test is whether the goods are pre-packaged and labelled, not whether they carry a brand name. A retail pack of 25 kg or less that is required to bear Legal Metrology declarations is taxable. A pack above 25 kg is not, because rule 3(a) of the Legal Metrology (Packaged Commodities) Rules 2011 does not require a declaration on it. And if you sell the same staple loose, weighed out from a larger pack, that supply is not a packaged commodity for GST at all. Same commodity, three different answers.
If I buy a 25 kg labelled bag and sell it loose, do I charge GST?
No. The Ministry of Finance FAQ is explicit: if for any reason a retailer supplies the item in loose quantity from such a package, that supply by the retailer is not a supply of a packaged commodity for the purpose of GST levy. Your supplier will have charged you GST on the labelled bag, and you take that credit in the normal way. One consequence to raise with your accountant: where an outward supply is not taxable, the input tax credit attributable to it is restricted under Section 17(2) and computed under Rule 42. The FAQ does not address that point.
Can I avoid GST by not printing the label?
No, and it makes things worse. The FAQ deals with exactly this: a miller selling 20 kg rice packs without making the required declaration is still treated as supplying a pre-packaged and labelled commodity, because rule 6 required a declaration. The test is whether a declaration is required, not whether one was printed. You would owe the GST anyway and have a Legal Metrology problem on top.
Which grocery items are nil-rated now?
After the September 2025 reform, all Indian breads, UHT milk and pre-packaged and labelled chena or paneer are at nil. Packaged namkeen, bhujia, sauces, pasta, chocolates, coffee and preserved meat came down to 5%, as did soaps, shampoos, toothbrushes, toothpaste and tableware. Those are the lines named in the government's own reform document. Anything not named there sits outside this list, so confirm your own HSN codes. Our free GST calculator is handy for checking a single bill.
What about supplies to canteens, hostels or offices?
Packaged commodities supplied for consumption by industrial or institutional consumers are excluded from the Legal Metrology Act by rule 3(c) of the Packaged Commodities Rules 2011, so they are not pre-packaged and labelled for GST purposes either. If institutional supply is a meaningful part of your business it is worth getting the treatment confirmed for your specific arrangements. If you are also filing monthly, the GST return filing checklist covers the calendar, and the GST invoice template pack has compliant formats.
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