Nirmala Sitharaman’s approach to the duty of GST on specified food.
Nirmala Sitharaman said that certain particulars including beats daal, wheat, rye, oats, sludge, rice, atta/ flour, suji / rawa, besan, puffed rice, curd/ lassi when sold loose and non-pre-packed or pre- labelled, will not attracting G. Union Finance Minister Nirmala Sitharaman on Tuesday released a list of particulars that will not attract any GST, when sold loose, and not pre-packed or pre-labelled.
Amid protests by opposition members over the duty of GST on some new particulars and on price rise issues, Lok Sabha proceedings are suspended today. Defending the duty of 5 GST on food papers analogous as cereals, rice, flour and curd, which are pre-packaged and labelled, FM Sitharaman said that it was an amicable decision of the GST Council last month in which indeed non- BJP ruled countries were present.
Sitharaman further said the council recommended reconsidering the approach for the duty of GST on specified food particulars like beats, cereals, flour etc.
Sitharaman said that certain particulars including beats daal, wheat, rye, oats, sludge, rice, atta/ flour, suji/ rawa, besan, puffed rice, curd/ lassi when sold loose and non-prepackaged or pre- labelled, will not attractancy GST. In a series of tweets, the FM said, “ recently, the GST Council in its 47th meeting recommended to review the approach for duty of GST on specified food particulars like beats, cereals, flour, etc. There have been a lot of misconceptions about this that have been spread. also, a thread to lay the data.”
“Is this the first time analogous food papers are being tested? No. States were collecting significant profit from food grain in the pre-GST governance. Punjab alone collected more ₹,000 cr on food grain by way of purchase duty. UP collected ₹ 700 cr.”
“Taking this into account, when GST was rolled out, a GST rate of 5 was made applicable on BRANDED cereals, beats, and flour. Subsequently, this was amended to duty only analogous particulars which were sold under REGISTERED brand or brand on which enforceable right was not forthcoming by the supplier.” “ Still, soon rampant abuse of this provision was observed by reputed manufacturers & brand owners and gradually GST profit from these particulars fell significantly.”
“This was Envied by suppliers and sedentary associations who were paying impositions on hardwired goods. They wrote to the Govt to put GST slightly on all packaged goods to stop analogous abuse. This rampant evasion in duty was also observed by States.”
” The Fitment Committee — consisting of officers from Rajasthan, West Bengal, Tamil Nadu, Bihar, Uttar Pradesh, Karnataka, Maharashtra, Haryana & Gujarat had also examined this issue over SEVERAL meetings and made its recommendations for changing the modalities to check abuse.”
” It’s in this terrain that the GST Council in its 47th meeting took the decision. With effect from July 18, 2022, only the modalities of duty of GST on these goods were changed with no change in the content of GST except 2- 3 particulars. “It has been specified that GST on these goods shall apply when supplied in “pre-packaged and labelled” goods attracting the vittles of Legal Metrology Act.”
“For illustration, particulars like beats, cereals like rice, wheat, and flour, etc. Before attracted GST@ 5 when ingrained and packed in a unit vessel. From18.7.2022, these particulars would attract GST when “pre-packaged and labelled”.”
“It must also be noted that particulars specified below in the list, when sold loose, and not pre-packed or pre- labelled, will not attract any GST.” “ This was an amicable decision by the GST Council. All countries were present in the GST Council when this issue was presented by the Group of Ministers on Rate Rationalization in the 47th meeting held in Chandigarh on Jun 28, 2022.”