Traders’ Body Urges Govt To Hold GST Levy On Unbranded Food Items For 3 Months

New Delhi, July 19: Delhi-based traders’ grouping Confederation of All India Traders (CAIT) has urged the government to put on hold the decision to levy 5% GST on unbranded food-grains and other essential items for 3 months.

In a letter to Finance Minister Nirmala Sitharaman, CAIT Secretary General Praveen Khandelwal claimed that manufacturers, processors and vendors across the country have packaging material worth almost Rs 6,000 crore as they generally keep stock for 3-6 months.

He further said that with the pre-packaged and labelled food items coming under GST ambit and their packing in line with Food Safety and Standards Act and Legal Metrology Act a huge chunk of packaging materials would be rendered useless.

“Considering the above facts, it is necessary to extend the roll-out of new GST levy. This will not only ensure that existing packaging materials are used but also avoid a possible scenario of scarcity in the market,” Khandelwal said.

He also said that packaging material manufacturers would have to make fresh capital investment in order to cater to the new requirements in the market and hence they should be given time to arrange the resources.

In line with the decisions of the 47th GST Council meeting chaired by Finance Minister Nirmala Sitharaman, a 5% GST has been imposed on a wide range of ‘pre-packaged and labelled’ food items starting July 18, 2022.

Accordingly, apart from items like rice, pulses, flour and cereals, several other items such as curd, lassi, puffed rice etc. when “prepackaged and labelled” would also attract GST at the rate of 5%.

The government, however, clarified on Monday that only food packages of less than 25 kg would be considered ‘pre-packaged and labelled’ and attract 5% GST while packs of more than 25 kg would not attract the levy.

So, essentially, GST would not be levied on wholesale packs while retail packs would attract the tax forcing the consumers to shell out more for the specified essential items.

As the new tax would affect the common man, it has triggered protests from various sections including opposition political parties. But the central government has justified the move saying that it is aimed at curbing tax leakage.

#GST @FinMinIndia @PIB_India @PIBMumbai @PIBChandigarh @PIBHyderabad @pibchennai @PIBKolkata @PIBKohima @PIBGuwahati @PIBHindi @cbic_india https://t.co/EDWfuYnGzC

— Nirmala Sitharaman (@nsitharaman) July 19, 2022