Food grains may not be cheaper under GST

Will Food grains and pulses really become cheap after the roll out of Goods and Services Tax (GST)? The fine print is different than what is being made to believe.

The GST Council has proposed a zero rate structure or nil tax for most of the food grains. However, branded food will b e taxed at 5%.

Neither the Council nor the ministry clarified what constitutes branded food. But all the food related packaged commodities have to be registered under the Food Safety Standard Act. The moment a trader lists himself under this Act, his commodity becomes branded.

By that standard, all packaged food will have to be taxed at 5%. Only those that come loose and sell mostly in mum & stores and roadside venders will qualify for nil tax.

“We have appealed to the finance minister to come out with a categorical classification of branded and non-branded food items as the traders are really confused,” said apex traders' body CAIT chief Praveen Khandelwal but he regretted that the neither the finance minister nor the ministry has got back to him on this matter.

Similarly, he has also communicated with the ministry on the issue of 28% tax slab which was originally designed for luxury goods and sin items but apparently, even certain spare parts for two wheelers have been put in that category.

“How can a two wheeler come in luxury or sin goods,” he asked.
CAIT has said that though only five days are remaining for the GST roll out, most of the smaller details have not been answered yet.