Trade body CAIT opposes GST on pre-packed food items

The decision will benefit big corporate houses at the cost of small manufacturers and traders, CAIT said

A traders body has opposed the recent decision of the GST Council to levy 5 per cent GST on pre-packed and pre-labelled food items.

The Confederation of All India Traders (CAIT) has appealed to the GST Council, Union Finance Minister Nirmala Sitharaman and State Finance Ministers to withdraw the decision and demanded to hold discussions with the stakeholders.

Condemning the GST Council's decision, CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said that the decision will have multiple effects in foodgrain trade of the country and would load the citizens with extra financial burden.

“Surprisingly, the essential foodgrains have been taken under GST for the first time in India when state Governments and the Central Government in the GST Council together have planned levy of tax on pre-packed and pre-labelled foodgrain, which will have a negative impact not only the trade but also on the agriculture sector. The decision will benefit big corporate houses at the cost of small manufacturers and traders,” they said in a statement.

“The rationale behind the opposition is that the both Central & state governments are collecting as high as 28 per cent GST on certain commodities to compensate for revenue losses in lieu of keeping agriculture produce out of the GST regime. If the GST Council wishes to impose tax on non-branded pulses and other agriculture commodities, the logic stands that the Council has to forgo a 28 per cent GST tax slab. Further, at a time when every month the GST collection is increasing, what is the need of bringing food items under the tax slab of 5 per cent under GST and those items as of now were not under any tax slab,” the statement said.