Essential food grains such as pulses, wheat, rice and maize will not attract the goods and services tax when sold in loose quantities from stores, Finance Minister Nirmala Sitharaman said.
The full list of food grains, shared on Twitter, includes pulses, wheat, rye, oats, rice, maize, flour, besan, rava and puffed rice along with dairy products such as curd and lassi.
The clarification follows an FAQ document released by the Central Board of Indirect Tax on the applicability of a 5% GST on pre-packed and labelled items on Sunday.
The document clarified that pre-packaged and labelled commodities with a predetermined weight, and those declared under provisions of Legal Metrology Act, 2009, would be included in the tax ambit.
Earlier, only food packets that were of registered brands or a brand on which enforceable right was not foregone by the supplier—that is product sold under a registered brand name—attracted the GST.
It must also be noted that items specified below in the list, when sold loose, and not pre-packed or pre-labeled, will not attract any GST. (10/14) pic.twitter.com/NM69RbU13I
July 19, 2022AdvertisementIn the Twitter thread, the finance minister highlighted that the states were collecting revenue from food grains even before the GST was implemented. "Punjab alone collected more than Rs 2,000 crore on food grain by way of purchase tax. UP collected Rs 700 crore," her tweet read.
Image shared by Finance Minister on Twitter on pre-GST rates on food grains. (Source: Finance Ministry)
The tweets mentioned that suppliers and industry associations wrote to the ministry to impose a uniform rate on all packaged commodities to prevent misuse by manufacturers.
"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 curb misuse," the tweet read.
Sitharaman said the decision to levy the 5% GST was unanimous and included the consensus of non-BJP states as well. It was considered at various levels, including an empowered group of ministers and finally, the GST Council before it was put in effect with the larger intent to curb evasion and tax leakage, she said.
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