New Delhi: Finance Minister facing criticism over GST on items of daily use Nirmala Sitharaman On Tuesday, 5 percent tax is being levied on wheat flour and other items after approval from all states, including non-BJP ruled states.
He said that the non-BJP ruled states of Punjab, Chhattisgarh, Rajasthan, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana and Kerala had agreed to levy 5 per cent.
In a series of tweets, Sitharaman said states levied sales tax or VAT on foodgrains in the pre-Goods and Services Tax (GST) regime and the current levy on cereals, pulses, flour, curd and lassi as a way to check leakage. is practice.
The decision, she said, was taken by GST CouncilWhere all the states are represented through a consensus.
The minister’s remarks come against the backdrop of the first two days of the monsoon session of Parliament, which has almost washed out due to vociferous protests by opposition parties over GST on items of daily use and other issues.
“Is this the first time such food items are being taxed? No. States were collecting significant revenue from food grains in the pre-GST regime. Punjab alone collected over Rs 2,000 crore on food grains through purchase tax collected. UP collected Rs 700 crore,” he said.
Sitharaman also cited VAT on rice imposed before 2017 in Punjab, Telangana, Uttar Pradesh, Andhra Pradesh, Kerala and Bihar to substantiate her point.
The tweet, however, did not give examples of taxing pulses, paneer and lassi as is the case now.
“Recently, the GST Council in its 47th meeting had recommended to reconsider the approach of levying GST on specific food items like pulses, cereals, flour, etc. A lot of misunderstandings are being spread about this,” the minister said. Told. Told.
When the GST regime, which included 17 central and state taxes, including central excise duty and state VAT, was introduced in July 2017, ‘branded’ cereals, pulses and flour were taxed at 5 per cent.
“Later it was amended to levy tax on only those goods which were sold under the registered brand or brands on which the enforceable right was not relinquished by the supplier,” it said. “However, soon a large-scale misuse of this provision was noticed by reputed manufacturers and brand owners and gradually the GST revenue from these items declined significantly.”
He said that the suppliers and industry associations have asked the government to levy GST uniformly on all packaged goods to prevent such misuse.
The issue was referred to a fitment committee consisting of officials from Rajasthan, West Bengal, Tamil Nadu, Bihar, Uttar Pradesh, Karnataka, Maharashtra, Haryana and Gujarat.
He said the panel examined the issue in several meetings and made its recommendations to change the modalities to prevent misuse.
The recommendations of the committee were examined by a group of ministers made up of members from West Bengal, Rajasthan, Kerala, Uttar Pradesh, Goa and Bihar and chaired by the Chief Minister of Karnataka.
The GoM’s recommendation was placed before the GST Council, the highest decision-making body of the new tax regime, in a meeting held in Chandigarh last month.
“It is in this context that the GST Council took the decision in its 47th meeting. With effect from July 18, 2022, only the modalities of levying GST on these items were changed, leaving no one except 2-3 items in the coverage of GST. The change was not made,” he said.
5 per cent GST was levied on these food items supplied “pre-packaged and labeled”.
“For example, pulses, cereals like rice, wheat and flour, etc., earlier attracted 5% GST when branded and packaged in unit containers. From 18.7.2022, these items will attract GST when ‘pre-packaged’. And will be labeled.’,” she said.
However, no GST on pulses, wheat, rye, oats, maize, rice, atta, semolina, gram flour, puffed rice and curd/lassi when sold in the open and not pre-packaged or pre-labelled It will take
“It was a unanimous decision by the GST Council. All the States were present in the GST Council when the issue was presented by the Group of Ministers on Rationalization of Rates in the 47th meeting held at Chandigarh on June 28, 2022.
Sitharaman said, “All states including non-BJP states (Punjab, Chhattisgarh, Rajasthan, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, Kerala) are in agreement with this decision. This decision of the GST Council is once again by consensus. ”
He said the changes were recommended by the GoM and “the proposal was carefully considered keeping in mind the tax leakage.”
“To conclude: This decision was a very necessary one to prevent tax leakage. It was considered at various levels including officials, Group of Ministers, and finally recommended by the GST Council with full consent of all the members was gone,” she said. Told.”
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