Looking for expert help with Income tax and GST for fruit and vegetable wholesalers and commission agents India? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Key Takeaways
- Fresh and chilled vegetables and fresh fruits are exempt from GST from 22 September 2025 (Notification 10/2025-Central Tax (Rate)), and so are frozen vegetables of heading 0710.
- Raisins, dried dates, figs and mangoes, other dried fruit and frozen fruit are taxed at 5% (Notification 9/2025-Central Tax (Rate)).
- A trader selling only exempt produce doesn't need GST registration (Section 23(1)(a), CGST Act). Add one taxable line and exempt sales count towards the Rs 20 lakh limit in Telangana.
- Mandi commission on agricultural produce is exempt from GST, but a commission agent can't use Section 44AD and must keep full books.
- Cash paid straight to a farmer is outside the Rs 10,000 limit of Section 40A(3) (Rule 6DD(e)), but cash paid to another trader isn't.
Do fruit and vegetable traders need GST registration? Not if they sell only fresh fruit and vegetables. Those are exempt under Notification 10/2025-Central Tax (Rate) from 22 September 2025, and Section 23(1)(a) of the CGST Act exempts a person dealing only in exempt goods from registration. If the trader also sells taxable items like raisins or frozen fruit, the normal turnover limit applies, counting exempt sales too.
Most wholesale fruit and vegetable traders have been told "there's no GST on vegetables" and stop there. That's true for the onions and tomatoes. It stops being true the day you start stocking dates in Ramzan, raisins before Diwali or frozen fruit for a hotel client. And the income tax side depends on how you work: buying and selling on your own account, or earning commission as an agent at the APMC yard. This guide covers both for FY 2025-26 (AY 2026-27), under the Income-tax Act 1961 and the GST rates in force since 22 September 2025.
Which fruits and vegetables are GST-free, and which aren't?
The line is drawn by form, not by crop. Fresh, chilled and plain frozen vegetables are exempt. Dried fruit and frozen fruit aren't.
Comparison
GST on Fruit and Vegetables from 22 September 2025
| What you sell | GST | Entry |
|---|---|---|
| Fresh or chilled vegetables: potatoes, tomatoes, onions, garlic, cabbage, carrots, cucumbers, beans, other vegetables (0701-0709) | Nil | Notif 10/2025-CT(R), S. No. 27-35 |
| Frozen vegetables, uncooked or steamed or boiled (0710) | Nil | Notif 10/2025-CT(R), S. No. 36 |
| Dried vegetables, not further prepared (0712) | Nil | Notif 10/2025-CT(R), S. No. 38 |
| Fresh fruit: bananas (fresh or dried), mangoes, guavas, citrus, grapes, melons, papaya, apples, pomegranates, sapota, custard apple, lichi (0803-0810) | Nil | Notif 10/2025-CT(R), S. No. 46-53 |
| Coconuts, fresh or dried; dried tamarind | Nil | Notif 10/2025-CT(R), S. No. 43, 54 |
| Dried dates, figs, mangoes and guavas (0804); dried citrus (0805) | 5% | Notif 9/2025-CT(R), Sch I, S. No. 26, 27 |
| Raisins and dried grapes (0806) | 5% | Notif 9/2025-CT(R), Sch I, S. No. 28 |
| Frozen fruit, with or without added sugar (0811) | 5% | Notif 9/2025-CT(R), Sch I, S. No. 29 |
| Other dried fruit and dried fruit mixtures (0813), other than dried tamarind | 5% | Notif 9/2025-CT(R), Sch I, S. No. 31 |
Source: Notification 10/2025-Central Tax (Rate) and Notification 10/2025-Integrated Tax (Rate), both in force from 22 Sep 2025; Notification 9/2025-Central Tax (Rate), Schedule I (2.5% CGST + 2.5% SGST)
The exemption entries in Notification 10/2025-Central Tax (Rate) cover sales within your state. Sales to a buyer in another state are covered by the same serial numbers in Notification 10/2025-Integrated Tax (Rate). So a Hyderabad trader trucking onions to Bengaluru doesn't charge IGST on them either.
Watch the "fresh" word. Headings 0804 to 0810 are exempt only when fresh. Bananas are the one fruit where the exempt entry says "fresh or dried". A trader who sells fresh dates in season and dried dates the rest of the year is selling one exempt item and one 5% item under the same name.
Do you need GST registration?
Here's how the law works, step by step.
Step-by-Step Guide
Does Your Fruit and Vegetable Business Need GST Registration?
Is every item you sell exempt?
If you sell only fresh vegetables, fresh fruit and other items in the nil list, you're not liable to register under Section 23(1)(a) of the CGST Act, however large your turnover.
Do you sell any taxable item?
Raisins, dried dates, frozen fruit, or a service like renting out crates or a ripening chamber to others. If yes, go to the next step.
Add up aggregate turnover
Section 2(6) counts taxable sales AND exempt sales. Your vegetable sales count, even though no GST is charged on them.
Compare with your limit
For a goods-only trader the limit is Rs 40 lakh in most states, but Rs 20 lakh in Telangana and nine other states (Notification 10/2019-Central Tax). Add any taxable service and the Rs 20 lakh limit applies everywhere except Manipur, Mizoram, Nagaland and Tripura (Rs 10 lakh).
Above the limit? Register
Charge 5% only on the taxable lines. Exempt lines still go on the bill at nil, and they're reported in your returns as exempt supplies.
Source: Sections 2(6), 22 and 23(1)(a), CGST Act 2017; Notification 10/2019-Central Tax
Example: a wholesaler in Hyderabad sells Rs 32 lakh of fresh fruit in FY 2025-26, and Rs 6 lakh of dried dates and raisins during Ramzan and Diwali.
- Aggregate turnover: Rs 32,00,000 + Rs 6,00,000 = Rs 38,00,000.
- Telangana's goods limit is Rs 20 lakh, so this trader must register, even though only Rs 6 lakh of sales are taxable.
- GST is charged only on the dates and raisins: 5% of Rs 6,00,000 = Rs 30,000.
- If the same trader dropped the dry fruit and sold only fresh fruit, registration wouldn't be needed at all.
Once registered, remember that input tax credit on purchases used for exempt sales isn't available (Section 17(2), CGST Act). If you pay 18% GST on a cold room's rent and use it for both exempt and taxable stock, only the share linked to the taxable stock can be claimed. Our GST registration service handles the application, and our turnover limit guide explains aggregate turnover in more detail. If dry fruit is most of your trade, see our dry fruit traders guide.
GST for mandi commission agents
If you sit at the APMC yard and sell farmers' produce for a commission, your service is exempt under S. No. 54(g) of Notification 12/2017-Central Tax (Rate): "services provided by a commission agent for sale or purchase of agricultural produce". The same entry exempts services of the Agricultural Produce Marketing Committee itself.
Two other exemptions often apply in a mandi:
- Loading, unloading, packing, storage or warehousing of agricultural produce (S. No. 54(e)).
- Pre-conditioning, pre-cooling, ripening, waxing, retail packing and labelling of fruits and vegetables that don't change their essential characteristics (S. No. 57). A banana ripening service for other traders fits here.
The catch is the definition. The notification defines "agricultural produce" as produce on which no further processing is done, or only the processing a cultivator usually does, which makes it marketable for the primary market. Fresh vegetables and fruit sold through the yard qualify. Commission on processed goods doesn't, and once you earn taxable commission, the Rs 20 lakh service limit applies to your aggregate turnover.
Income tax: trader on own account vs commission agent
How you're taxed depends on what you earn.
Buying and selling on your own account. A resident individual, HUF or partnership firm (not an LLP) can use Section 44AD. Deemed profit is 6% of turnover received through banking channels and 8% of cash turnover. The limit is Rs 2 crore, or Rs 3 crore if cash receipts are within 5% of turnover (Finance Act 2023). You file ITR-4, as long as total income is within Rs 50 lakh and the other conditions are met.
Example (proprietor, new tax regime, FY 2025-26): turnover Rs 1,80,00,000, of which Rs 60,00,000 came in cash. Cash is a third of turnover, so the Rs 2 crore limit applies, and Rs 1.8 crore is within it.
- 6% of Rs 1,20,00,000 (bank) = Rs 7,20,000.
- 8% of Rs 60,00,000 (cash) = Rs 4,80,000.
- Deemed profit: Rs 12,00,000.
- Tax: Rs 4-8 lakh at 5% = Rs 20,000; Rs 8-12 lakh at 10% = Rs 40,000. Total Rs 60,000.
- Income is within Rs 12 lakh, so the Section 87A rebate of up to Rs 60,000 covers it. Tax payable: nil.
Move just Rs 10 lakh of that cash to UPI and deemed profit drops by 2% of Rs 10 lakh, or Rs 20,000. Small shifts in how buyers pay change the bill.
Earning commission at the mandi. Section 44AD doesn't apply to a person earning income in the nature of commission or brokerage, or to anyone carrying on agency business. So a commission agent works out actual profit from books of account, files ITR-3 (individual or HUF), and needs a tax audit under Section 44AB once business turnover crosses Rs 1 crore, or Rs 10 crore if cash receipts and cash payments are each within 5% (Finance Act 2021). Our accounting and bookkeeping service keeps the ledgers, and our tax audit guide covers the audit.
Example (commission agent, new tax regime, FY 2025-26): gross commission Rs 22,00,000; staff wages, yard rent, hamali and other expenses Rs 8,50,000.
- Profit: Rs 13,50,000.
- Tax: Rs 20,000 + Rs 40,000 + 15% of Rs 1,50,000 (Rs 22,500) = Rs 82,500.
- Income is above Rs 12 lakh, so there's no rebate. Marginal relief doesn't apply, because Rs 82,500 is less than the Rs 1,50,000 by which income exceeds Rs 12 lakh.
- Add 4% cess of Rs 3,300. Total: Rs 85,800.
Tax Rate Chart
New Tax Regime Slabs, FY 2025-26 (AY 2026-27)
Up to Rs 4 lakh
Rs 4-8 lakh
Rs 8-12 lakh
Rs 12-16 lakh
Rs 16-20 lakh
Rs 20-24 lakh
Above Rs 24 lakh
Source: Finance Bill 2025 memorandum; Section 115BAC(1A), Income-tax Act 1961
From FY 2026-27 the Income-tax Act 2025 replaces the 1961 Act and section numbers change, but your FY 2025-26 return still follows the 1961 Act.
Cash, farmers and big buyers: three rules that bite
Paying farmers in cash. Section 40A(3) disallows an expense paid in cash where the payment to one person in a day exceeds Rs 10,000. Rule 6DD(e) of the Income-tax Rules 1962 carves out payments for agricultural produce, horticulture products and similar items made to the cultivator, grower or producer. So Rs 45,000 in cash to a farmer for a lorry of tomatoes is fine. Rs 45,000 in cash to another wholesaler for the same tomatoes isn't, and if you keep books, that purchase can be disallowed. Keep a record of who you bought from, so you can show the seller was the grower.
Receiving cash from buyers. Section 269ST bars receiving Rs 2 lakh or more in cash from one person in a day, for one transaction, or for transactions relating to one event. The penalty under Section 271DA equals the amount received. A hotel or caterer settling a week's bill of Rs 2.4 lakh in cash in one go breaks this rule. Ask for bank transfer or UPI. Our cash transaction limits guide has more examples.
TDS by big buyers. A supermarket chain or exporter whose turnover exceeded Rs 10 crore in the previous year deducts TDS at 0.1% under Section 194Q on what it pays you above Rs 50 lakh in a year. It applies to exempt goods too. Your side of it is simple: check Form 26AS or AIS and claim the credit in your return. TCS under Section 206C(1H) on the seller side no longer applies from 1 April 2025 (Finance Act 2025). See our Section 194Q guide.
Common mistakes fruit and vegetable traders make
- Leaving vegetables out of aggregate turnover. If you sell anything taxable, exempt vegetable sales still count towards the registration limit.
- Treating dried and frozen fruit like fresh fruit. Raisins, dried dates and frozen fruit are 5%. Frozen vegetables, on the other hand, are nil.
- Commission agents filing under 44AD. The law bars commission and agency income from Section 44AD, so ITR-4 isn't the right form for it.
- Paying traders in cash above Rs 10,000. The Rule 6DD exception is for growers only.
- Ignoring 194Q credits. If a big buyer deducted 0.1% and you don't claim it in your return, you lose that credit.
How Tax Garden helps fruit and vegetable traders
We check whether your mix of fresh and dried produce pushes you over the GST limit, register you and set up invoices that split exempt and 5% lines. If you work on commission, we keep your books and arrange the audit when it's due. At year end we compare Section 44AD with actual profit for own-account trading and file through our ITR filing service. See pricing for plans.
