The finance ministry said they had received representations for reconsidering the 5% Goods and Services Tax (GST) on pre-packaged and labelled food items such as rice and pulses.
Minister of state for finance Mr. Pankaj Chaudary explained the circumstances under which GST won’t be levied in Lok Sabha. He said that food grains, pulses, flour, curd, paneer, lassi, and buttermilk sold in the loose form don’t attract tax, and its consumer won’t be affected by the GST hike decision.
He also explained that the taxpayer selling the above items in the pre-packaged and labelled form is claiming the Input Tax Credit (ITC) on inputs and input services; the GST impact would be marginal for consumers. Also, if the suppliers of such pre-packaged and labelled items are eligible for threshold exemption or composition scheme, they’ll be entitled to exemption or composition GST rate, respectively.
He clarified that the Council had imposed GST on essentials considering all the relevant factors. Council is a constitutional body comprising representatives from the Centre, states, and union territories.
He reiterated that the Council, at its 47th meeting, made a unanimous decision to impose GST on pre-packaged and labelled forms for specified goods like pulses, rice, flour, paneer, etc., at a nominal rate of 5%.
This GST hike decision got implemented on 18th July 2022 and has led to protests from some opposition parties demanding a rollback of the tax increase. However, the minister did not comment on whether there is a re-think of the 5% tax on these items.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.