GST for Rice Mills: Paddy, Rice, Bran & Milling
By Mithun K. Singh, Founder, Svasamm Research · 14 July 2026
GST on rice comes down to one thing: loose or packed. Paddy and loose, unbranded rice are nil-rated, but rice sold "pre-packaged and labelled" attracts 5% GST — the rule in force since 18 July 2022 — and by-products like bran and husk each have their own treatment. This guide lays out the full landscape so you can bill correctly.
The quick reference table
| Item | HSN | GST (general position) |
|---|---|---|
| Paddy (raw, in husk) | 1006 10 | Exempt (nil) |
| Brown / husked rice | 1006 20 | Nil-rated |
| Rice — loose / unbranded | 1006 30 | 0% (nil) |
| Rice — pre-packaged & labelled | 1006 30 | 5% |
| Broken rice — pre-packaged | 1006 40 | 5% |
| Rice husk | 2302 | Exempt (generally) |
| Rice bran | 2302 40 | Taxable (commonly 5%; varies) |
The pre-packaged rule is the big one
Since July 2022, the GST line for rice isn't 'branded vs unbranded' — it's pre-packaged and labelled. Rice sold loose is nil-rated; the same rice in a pre-packaged, labelled pack attracts 5% GST. For a mill that sells both ways, the same product is taxed differently by how it's packed — your billing has to get this right per invoice.
By-products: each has its own treatment
- Husk — generally exempt.
- Bran — taxable (commonly 5%); classification differs for de-oiled bran / cattle-feed grades.
- Broken rice — follows the same pre-packaged/loose logic as rice.
Milling charges (custom milling / job work)
When you mill the government’s paddy under CMR, you’re supplying a service (job work, SAC 9988), and the milling charges generally attract GST (commonly 5%). Confirm the current position — it’s separate from GST on rice you sell on your own account.
The input tax credit trap
If a large share of your output is exempt (loose/unbranded rice, husk), you generally cannot claim full input tax credit (ITC) — it has to be apportioned, and the exempt portion becomes a cost. Knowing your taxable-vs-exempt sales mix is essential for both compliance and pricing.
Bill GST correctly across paddy, rice & by-products
Millingo carries the right HSN/rate per item, distinguishes pre-packaged from loose sales, books by-products separately, and keeps your CMR and open-market billing straight.