FM Nirmala Sitharaman Lists Food Items Exempted From GST If Sold Loose

Nirmala Sitharaman

The Union minister in a set of tweets clarified the revised GST which came into effect on Monday. The tweets came after Lok Sabha proceedings were adjourned on Tuesday.

New Delhi: Union Finance Minister Nirmala Sithatharman on Tuesday listed out a number of food items that are exempted from the Goods and service tax if they are sold loose rather than pre-packed or pre-labeled.

Pulses, daal, wheat, rye, oats, maize, rice, aata/flour, suji/rawa, besan, puffed rice and curd/lassi are the items mentioned by the FM.

The Union minister in a set of tweets clarified the revised GST which came into effect on Monday. The tweets came after Lok Sabha proceedings were adjourned on Tuesday amidst the opposition’s protest over the price hike and GST revision.

The FM defended the 5% GST on food items in her tweets and said the decision was unanimous by the GST council and all states were present in the meeting when this issue was discussed by the group of ministers on Rate Rationalization on June 28, 2022.

Sitharaman said, “This isn’t the first time that such food items are being taxed. States were collecting significant revenue from food grains in the pre-GST regime. Punjab alone collected more than Rs 2,000 Cr on food grain by the purchase of tax. UP collected 700 cr.”

She further said, “when GST was rolled out, a GST rate of 5 % was made applicable on branded cereals, pulses, flour. Later this was amended to tax only such items which were sold under registered brand or brand on which enforceable right was not foregone by the supplier.”

She also said, soon there was rampant misuse of this provision by reputed manufacturers and brand owners and gradually GST revenue from these items fell significantly.

“This was Resented by suppliers and industry associations who were paying taxes on branded goods. They wrote to the Govt to impose GST uniformly on all packaged commodities to stop such misuse. This rampant evasion in tax was also observed by States,” the FM tweeted.

The minister said that the Fitment committee which considered officers from Rajasthan, West Bengal, Tamil Nadu, Bihar, Uttar Pradesh, Karnataka, Maharastra, Haryana, and Gujarat had also examined this issue over several meetings and made recommendations for changing the modalities to curb misuse.

Referring to the GST council meet decision Sitharaman said, “It is in this context that the GST Council in its 47th meeting took the decision. With effect from July 18, 2022, only the modalities of imposition of GST on these goods was changed with no change in coverage of GST except 2-3 items”.

Informing about why pre-packaged and labeled commodities would attract the GST the minister wrote,”It has been prescribed that GST on these goods shall apply when supplied in pre packaged and labeled commodities attracting the provision of Legal Metrology Act”.


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