New Delhi The Finance Ministry on Monday said requests have been received to reconsider the imposition of 5% Goods and Services Tax (GST) on pre-packaged and labeled food items such as pulses and rice.
Minister of State for Finance, Pankaj Chaudhary, in a written reply to a question in the Lok Sabha, told that when this tax will not be applicable. He said that when sold in loose form (not pre-packaged and labeled as), cereals, flour, pulses, curd, lassi, buttermilk and paneer are exempt from GST and its consumer is not affected by the tax. .
“In case of such items pre-packaged and labeled, given that the taxpayer will get input tax credit on inputs and input services, the net effect of GST on consumers will be marginal. In addition, the suppliers of such pre-packaged and labeled items who would be eligible to avail threshold exemption or composition scheme, would be entitled to rebate or composition rate, as the case may be,” the minister explained.
He said that the rates of GST have been fixed on the recommendation of the GST Council, which is a constitutional body consisting of representatives of States, Union Territories and the Center, taking into account all relevant factors.
In its 47th meeting held in Chandigarh on 28 June, the Council unanimously recommended levying GST at nominal rate on ‘pre-packaged and labeled’ form for specific goods like pulses, rice, flour, paneer, etc. of 5%. The change was effective from 18 July and has led some opposition parties to demand a roll-back of the tax hike.
The minister did not comment on whether the imposition of 5% tax on these items was being reconsidered.
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