Vegetables are exempt across most forms
Notification 10/2025-Central Tax (Rate) exempts potatoes (0701), tomatoes (0702), onions, shallots and garlic (0703), cabbages, cauliflowers and similar brassicas (0704), other vegetables fresh or chilled (0709), vegetables uncooked or cooked by steaming or boiling in water whether frozen or not (0710), vegetables provisionally preserved but unsuitable for immediate consumption (0711), and dried vegetables (0712) in the forms covered there. Read the entry for each heading before billing processed forms, because some carry packing conditions.
Bill of supply and registration
A wholesaler dealing only in exempt vegetables is not required to register. If registered, the trader issues a bill of supply. Many mandi traders choose registration only because they also sell taxable items such as packed products or because large buyers insist on a GSTIN. Even then, no tax is charged on vegetable lines.
Prepared vegetables are taxable
Vegetables, fruit and nuts prepared or preserved by vinegar, frozen after cooking beyond steaming or boiling, or otherwise processed fall under chapter 20, which is in the 5% schedule. A wholesaler who supplies cut, marinated or cooked vegetables to hotels has moved into a taxable product and must bill those lines separately at 5%.
Ripening, packing and commission
Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing and labelling of fruits and vegetables that do not alter their essential characteristics are nil-rated under entry 24 of Notification 11/2017. Commission on sale of vegetables as agricultural produce is also nil. A wholesaler who also acts as a commission agent can therefore bill both activities without tax.
Credit sales, returns and rate changes
Vegetable prices change every morning, and wholesalers routinely give credit to retailers and hotels for a week or a month. Because no GST is involved, a credit note for spoiled or returned produce is a commercial document only and does not affect returns, but it should still refer to the original bill number and date. A wholesaler who supplies hotels and caterers on a monthly contract should issue a bill for each delivery or a consolidated monthly bill listing delivery dates, quantities and daily rates. That record matters when a buyer disputes a rate weeks later, and it is the only evidence of turnover if the trader later needs to show that registration was not required.