Food processing
Grape, onion, dairy, fruit and vegetable processing, and the cold storage attached to it. GST rates, purchases from farmers, seasonal stock and bank finance are handled from our Nashik office.
Last reviewed 1 October 2026
Food processors in the Nashik belt turn grapes, onions, milk, fruit and vegetables into packed and stored products, and the harvest sets the pace of their year. Stock rises within weeks and bank limits follow it. Since the 2025 rate changes, the GST classification of every SKU also has to be right, because an error is repeated on each invoice until a notice finds it.
The issues that arise most often are set out below, with the way we work on them from Nashik. Types of work are described and no clients are named.
The issues food processors face
Food processing in the Nashik belt includes grape, onion, dairy, fruit and vegetable processing, cold storage and the packing that goes with them. Much of it sits in Dindori, Niphad, Vinchur and the neighbouring talukas, near the land where the crop is grown, and both cash and stock rise and fall with the harvest. The notes below are general, state the law as it stands at 1 October 2026 and are not advice on any particular set of facts.
GST classification after the 2025 rate changes
GST rates on many food products changed on 22 September 2025 under the consolidated rate schedules (Notification No. 9/2025-Central Tax (Rate) and the matching integrated-tax notification), so each product has to be checked individually. A wrong HSN on a high-volume SKU is repeated on every invoice until someone notices it, and the shortfall, with interest, is then demanded for the whole period. One crop can attract different rates when it is sold fresh, dried, frozen or packed.
Seasonal stock and year-end valuation
Farmers deliver raw material within a short season. Stock therefore builds quickly, and the bank frequently sanctions pledge or seasonal limits against it. At the year end the valuation questions follow. Finished goods, work-in-progress and packing material have to be counted on one basis in the books and in the GST returns, and the stock statement given to the bank should rest on the same basis.
Purchases from farmers and composition of income
Processors around Dindori, Niphad and Lasalgaon commonly buy directly from growers. Where the same family also grows produce, the line between agricultural income and business income has to be drawn carefully. Payments, weighment slips and the purchase register should support what the return claims. Where tax deducted at source applies to a payment, it has to be deposited and reported on time under the Income-tax Act, 2025.
Cold storage, wastage and credit
Spoilage and loss of weight are ordinary in this trade. Each write-off needs a record that an officer or a stock auditor can trace. Where section 17(5)(h) of the CGST Act applies, input tax credit on goods destroyed or written off has to be reversed.
Inverted duty and refunds
Where inputs bear a higher rate than the output, refund of accumulated credit may be available. Success depends on the rate structure of the product and on orderly purchase and production records. The refund workings should agree with the returns for each month.
Working capital that moves with the crop
Banks often sanction seasonal or pledge limits, and drawing power moves as stock moves. If the stock statement, the books and the GST returns disagree at the height of the season, the renewal or the stock audit will find the difference, and a reduced drawing power at that point falls at the time cash is most needed.
How we work with food processors
We start with the purchase and stock files for the season. The GST classification of each product line is then reviewed.
GST classification and returns
Rate checks product by product, monthly returns and credit reconciliation, with refund workings where inverted duty applies. See GST.
Stock, cold storage and the bank
Inventory valuation and physical counts. Stock statements are agreed with the accounts before the bank reviews them. See manufacturing finance.
Income tax for the business and owners
Year-end tax computation, tax deducted at source, assessments and notices. Where a family has agricultural and business income in the same year, their treatment is settled within this work. See taxation.
Accounting through the season
A month-end close that a small team can repeat while receipts and dispatches are at their highest. See accounting and compliance.
Group and family structure
Where a processing unit runs beside a farm, a trading firm or another family entity, the entities and the transactions between them are mapped and documented. See family businesses and business advisory.
Food processing around Nashik
Processors, cold stores and traders take their supply from Dindori, Niphad, Vinchur and Lasalgaon, and the onion and grape seasons fix the cash calendar. Some of these businesses also operate a winery or export produce; the further excise, GST and export questions are discussed on those pages.
Related reading: agriculture, manufacturing and the Nashik page. We visit clients in Nashik district, and we work with clients elsewhere in Maharashtra from our Nashik office (Maharashtra).
Where we are a company's statutory auditor, section 144 of the Companies Act, 2013 limits the other services we may provide to that company and to its holding or subsidiary company.
Common questions
Our GST rate seems to have changed in 2025. How should we check?
Find the HSN of each SKU and compare it with the notified rate schedule applying from 22 September 2025. Earlier invoices are not a reliable guide. A product sold in more than one form, for example fresh, processed or packed, should be checked separately for each form.
The bank limit is based on stock we hold only for four months. What matters most?
Throughout that period the stock statement, the books and the GST returns have to show the same quantities and values. Wastage, packing, and goods held with farmers or in cold storage should all be visible in the records that the bank or an officer may ask to see.
We buy directly from farmers. Does that change our GST?
Purchases from agriculturists can fall outside GST, depending on what is bought and who supplies it. Outward supplies of processed goods still carry the rate for those goods. The purchase register and the nature of each supplier should be clear before any credit or exemption is assumed.
Tax on our inputs is higher than tax on our finished goods. Can we claim a refund?
If the rate structure produces an inverted duty position, refund of accumulated credit may be available. The claim requires orderly purchase, production and return records for every month. Since it rests on both sides of the rate structure, the classification of inputs and outputs is settled first.
Other industries: Manufacturing, Wine, Agriculture and agri-business, Exporters, Family businesses
Where we work: Chartered Accountants in Nashik, Chartered Accountants for businesses across Maharashtra