The trade body Confederation of All Indian Traders (CAIT) has written a letter to the Chief Ministers and Finance Ministers of all the states calling for the removal of the recently imposed Goods and Services Tax (GST) on grain pre-packaged and labeled foods.
The trade body has called for an urgent meeting of the GST Council to deliberate on the removal of taxes. From July 18, prepackaged and labeled pulses and grains such as rice, wheat and flour (atta) will be subject to 5% GST when marked and packed in a unit container, while curd , lassi and puffed rice will attract 5% per cent tax when pre-packaged and labeled.
The caveat, however, is that a single package of these items[cerealspulsesflour)containingaquantityofmorethan25Kgor25litrewouldnotfallinthecategoryofpre-packagedandtractledcommodityforthepurposeofGTPandwouldnotattracttheGTP[céréaleslégumineusesfarine)contenantunequantitédeplusde25kgou25litresnerelèveraitpasdelacatégoried’unproduitpréemballéetétiquetéauxfinsdelaTPSetn’attireraitdoncpaslaTPS[cerealspulsesflour)containingaquantityofmorethan25Kgor25litrewouldnotfallinthecategoryofapre-packagedandlabelledcommodityforthepurposesofGSTandwouldthereforenotattractGST
Recommendations on these GST rates were made at the 47th meeting of the GST Board held in June.
“We wish to inform you that merchants across the country are grappling with real difficulties in the implications of the same, while on the other hand, this will burden small merchants with a heavy compliance burden,” said writes the trade body in the letter to the states. .
She argued that the general public does not benefit from the exemption on such items over 25kg, as people typically buy goods in packages ranging from 1kg to 10kg.
“In this age of inflation, this tax will be a double whammy for the public,” the letter read.
There have been several doubts among people about the latest revision of the GST on food products.
Dispelling misconceptions about this, Union Finance Minister Nirmala Sitharaman said: “Is this the first time such food items have been taxed? in the pre-GST scheme. food grains through purchase tax. UP raised Rs 700 crore.”
Given this, a 5 per cent GST rate was previously applicable to branded cereals, pulses and flour. Later this was changed to only tax items sold under a registered trademark.
“However, reputable manufacturers and brand owners soon abused this provision and gradually GST revenues from these items dropped significantly,” she said, adding that many Suppliers and industry associations who paid taxes on branded goods were upset and wrote to the government to impose the GST evenly on all packaged goods to end such abuses.
“This was a unanimous decision of the GST Council. All States were present in the GST Council when this issue was presented by the Group of Ministers on Tariff Rationalization during the 47th meeting held in Chandigarh on 28 June 2022 “, she explained. (ANI)